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Where Taxpayers and Advisers Meet

MTD and VAT HELP

pawncob
Posts: 4295
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

MTD and VAT HELP

Postby pawncob » Fri Dec 07, 2018 5:35 pm

I know HMRC haven't published the MTD age exemptions list yet, but neither have they clarified who must use MTD for VAT submissions.
I act for a yacht club, which is VAT registered (voluntarily) with bar sales of £77k (gross) and subscriptions (exempt) £18k and (S.R.) £6k.
As the exempt income doesn't count for VAT purposes, do we have to use MTD software?
With a pinch of salt take what I say, but don't exceed your RDA

robbob
Posts: 2781
Joined: Wed Aug 06, 2008 4:01 pm

Re: MTD and VAT HELP

Postby robbob » Fri Dec 07, 2018 6:11 pm

As the exempt income doesn't count for VAT purposes, do we have to use MTD software?
Based on this bit
if your taxable turnover is above the VAT registration threshold you must follow the rules set out in this notice
i would generally say no as taxable turnover is under 85k.

However they unhelpfully then say
Only businesses with taxable turnover that has never exceeded the VAT registration threshold (currently £85,000) will be exempt from Making Tax Digital.
Ok so thats somewhat confusing - its not clear if that means every business must look back at their entire turnover history to make sure they haven't ever exceeded that vat threshold in the dim and distant past - it looks like that is what they are saying. I find it hard to believe they would be worried about what turnover was 5 years ago.

Perhaps i am missing something with skim reading sections here - apologies if this is the case -as ever though with hmrc the absolute lack of clarity in the written guidance again beggars belief. Who do they get to write this stuff? and do they check it with anyone who might read it before they release it?

https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat#check-if-you-have-to-follow-the-making-tax-digital-rules


https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat#check-if-you-have-to-follow-the-making-tax-digital-rules
2.1 Turnover test (exemption on the grounds of taxable turnover)
With effect from 1 April 2019, if your taxable turnover is above the VAT registration threshold you must follow the rules set out in this notice. If your taxable turnover subsequently falls below the threshold you will need to continue to follow the Making Tax Digital rules, unless you deregister from VAT or meet other exemption criteria (see paragraph 2.2 of this notice).

Only businesses with taxable turnover that has never exceeded the VAT registration threshold (currently £85,000) will be exempt from Making Tax Digital. You will therefore need to keep an eye on your taxable turnover, especially if you think it is close to the VAT registration threshold.

pawncob
Posts: 4295
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: MTD and VAT HELP

Postby pawncob » Fri Dec 07, 2018 7:17 pm

Turnover has never exceeded the £85k limit, but as you see it's very close. I agree with your interpretation, but wouldn't it be nice if someone at HMRC set out the correct position?
With a pinch of salt take what I say, but don't exceed your RDA

robbob
Posts: 2781
Joined: Wed Aug 06, 2008 4:01 pm

Re: MTD and VAT HELP

Postby robbob » Fri Dec 07, 2018 9:06 pm

wouldn't it be nice if someone at HMRC set out the correct position?

Yes

I am still praying that the house of lords have done their bit and we will get one year delay announced xmas eve (hidden news) - one can prey. The fact they are still in beta testing mode and have already admitted they themselves won't have their IT fully working beggars belief really, heads should roll and i would gladly roll em down the hill if they don't see sense :)


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