All Change for VAT

If your business is VAT registered and your sales exceed £85,000 a year, a major change will affect you from 1 April.

Hundreds of thousands of businesses will be affected, but with only weeks to go a significant number seem unaware of what is coming.

The change is called Making Tax Digital (MTD) for VAT.

Originally announced in 2015, it is a move by HMRC requiring businesses to maintain their VAT records in digital form.

From the beginning of their first VAT quarter commencing on or after 1 April 2019, businesses affected will have to use MTD-compliant software to maintain their business records and to file their VAT returns.

Handwritten records will no longer be acceptable for VAT purposes.

HMRC’s aim is to improve the quality of record keeping and reduce errors by ensuring that transactions are recorded closer to real time.

Ministers believe that record keeping errors cost the Treasury over £8 billion a year and that MTD for VAT will increase the amount of tax HMRC collects.

It is likely that MTD will be extended beyond VAT to income tax and corporation tax at some point after April 2020.

If you are already using software to maintain your VAT records, you should check that it is MTD compliant.

If you keep your records using spreadsheets, you will need to either start using MTD compliant software and special “bridging” software to link it to your spreadsheets or else move completely to MTD compliant software.

If you currently keep handwritten records then you will have to start using software instead.

There are many brands of software on the market as well as numerous apps.

Making the right choice of product and having access to training and guidance is important.

While some people find digital technology intimidating, many others find it gives them information that helps them run their businesses more efficiently.

If you will be affected by MTD for VAT (or think you may be but are not sure) you should speak to your accountant without delay.

If you don’t have an accountant and would like to know more, we are running a seminar – our last one was fully booked, so we are running another – at Taunton Racecourse on Tuesday 12 March and some places are still available.

If you would like to attend, call us on 01823 624450 or email

1 April is not far away. The sooner you take advice, the easier the transition to MTD will be.

Paul Aplin is a tax partner with A C Mole & Sons and President of the Institute of Chartered Accountants in England and Wales; you can follow him on Twitter at @PaulAplinOnTax or email him at