Making VAT Digital (MVD) Update – Draft Legislation Finalised
With recent developments on Making VAT Digital, combined with the fact that we are now within the 12 month countdown to the 1st April 2019 implementation, now seems an appropriate time to provide a further update on where things stand with MVD.
On 28th February 2018 the draft legislation – suggesting amendments to the necessary VAT Regulations – was laid before the House of Commons. Please see our earlier post HERE that refers to this and provides a background to MVD’s key features.
Following a review of the draft legislation, the final version of “The Value Added Tax (Amendment) Regulations 2018” has now been released – please follow The Value Added Tax (Amendment) Regulations 2018 to see the content, of which includes only a few minor changes from the earlier draft.
With this guidance now finalised and appreciating that some VAT accounting systems may take some time to update, we would urge clients to take the time sooner rather than later to look at their existing VAT return processes. Any VAT registered business with a turnover above the registration threshold needs to be MVD ready for April 2019. The change will impact on the first return period which commences after that date. Our advice is also not just to consider how your organisation may be affected by the digital changes to systems and processes under the MVD requirements but also to ensure that VAT data collection feeding into the Electronic VAT Account reflects all the reporting requirements for the current UK VAT Return.
As we undertake VAT Data Audits we are identifying risks areas around correct coding of necessary VAT adjustments whether that relates to Cash Book entries, Bad Debt processes or areas around overseas transactions. Our advice is that it’s better to take the time now to review coding processes and fit those into any software accounting changes that will be needed than to change software systems only to find they do not pulled together the correct data entries to the required VAT Return boxes.
If you have any questions, require further information or need VAT specific advice on the matter, then please contact us on 01633 415390 or firstname.lastname@example.org.
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