Do I need to comply with MTD for VAT if my turnover is below the threshold?

The simple answer is no, provided VAT turnover is less than the current threshold of £85,000 and the business is not already signed up to Making Tax Digital (MTD) for VAT.

Where a business is within MTD for VAT, even if turnover drops below the threshold, VAT returns will need to be MTD compliant.

For businesses below the threshold, HMRC’s existing online VAT return will continue to be available. This option will no longer be available to businesses within the scope of MTD.

Where turnover exceeds the threshold, MTD is compulsory from 1 April 2019, meaning businesses will have to:

• Keep digital accounting records (either using software or spreadsheets) – paper records will no longer meet the legal requirements in tax legislation.
• File VAT returns with HMRC using MTD compatible software that works with HMRC’s Application Program Interfaces (API) platform.

If you need any help with this then please don’t hesitate to get in touch.

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