This notice provides information further to the provisions of The Value Added Tax (Amendment) Regulations 2018 (SI 2018 No. 261), which amend the VAT Regulations 1995 (‘the regulations’).
Parts of this notice include rules that have the force of law under the regulations. These rules are indicated by being placed in a box. Unless otherwise indicated within the rule, all of the rules contained in this Notice have the force of law from the date the regulations have the force of law.
1.1 What this notice is about
This notice gives guidance on the digital record keeping and return requirements for Making Tax Digital for VAT. This notice is not a standalone document and should be read in conjunction with other VAT notices, in particular the ones listed at paragraph 1.3below. These are all available on GOV.UK.
1.2 Making Tax Digital explained
Making Tax Digital for VAT requires VAT registered businesses with taxable turnover above the VAT registration threshold to keep records in digital form and file their VAT Returns using software.
It is increasingly common for business records and accounts to be kept digitally, in a software program on a computer or tablet, or in a smartphone application, or maintained through such a device and stored using a cloud-based application. The difference under Making Tax Digital is that the software which businesses use must be capable of keeping and maintaining the records specified in the regulations, preparing their VAT Returns using the information maintained in those digital records and communicating with HMRC digitally via our Application Programming Interface (API) platform.
If your digital records are up to date, software will be able to collate and prepare your return for you. It will then show the return to you and ask you to declare that it is correct and confirm that you want to submit it to HMRC. Once you have submitted your return you will receive confirmation through your software that it has been received.
This notice provides further details of the Making Tax Digital rules.