More worryingly around half of the businesses surveyed by the ICAEW had no idea this was changing.
From 1 April 2019 businesses caught by the rules will be required to:
- Maintain their accounting records digitally in a software product or spreadsheet, and
- Submit their VAT returns to HMRC using functional compatible software – i.e. not the gateway
The burning question therefore is, who and what does this apply to?
- Only VAT registered businesses;
- With turnover of more than £85,000 (so if you voluntarily registered this may not apply but you can elect to join in the scheme);
- Your first VAT return period starting on or after 1 April 2019.
Once your turnover in the preceding 4 quarters exceeds the £85,000 threshold then you need to join the scheme and if your turnover falls below the limit you don’t exit the scheme. HMRC have prepared a list of software what is compatible with the new regulations:
Income tax and Corporation tax will follow in a year or two’s time.
I’ve prepared a short video to help you prepare... See Below.