Its implementation is expected to reduce tax lost through error and failure to take reasonable care and to assist business. MTD for VAT is the first stage in the implementation of MTD for Business.
MTD for VAT will affect businesses compulsorily registered for VAT, including sports clubs, even if they are not-for-profit or run on a voluntary basis.
It will require those affected to use software to maintain their VAT records and to provide HMRC with quarterly VAT returns and year end VAT returns online. This software must be compatible with HMRC's MTD requirements.
MTD for VAT will be introduced from 1st April 2019 generally. It will apply to sports organisations – including clubs – registered for VAT with turnover above the VAT threshold of £85,000pa.
A small minority of VAT-registered businesses with more complex requirements may be able to defer implementation until 1st October 2019.
These will include unincorporated not-for-profit organisations and those within VAT groups. HMRC is identifying those deferred businesses and says it will be writing to them before 31st December.
Currently HMRC is piloting the new system with VAT-registered businesses which have not been deferred and is writing to them now so that they can join the pilot and be ready for the 1st April deadline. Deferred businesses will not be able to join the pilot until Spring 2019.
HMRC has published a VAT Notice, Stakeholder Communications Pack and a list of software suppliers whose packages are compatible with Making Tax Digital.
The Sport and Recreation Alliance has previously published a more detailed FAQ document on MTD for VAT which is available here.
All sports organisations – including clubs – which are compulsorily registered for VAT because their annual turnover subject to VAT exceeds £85,000, need to take action now.
If your organisation or club is not VAT-registered or is registered voluntarily no immediate action is necessary. We recommend you review the position with your accountant and software provider as soon as possible.
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