MTD VAT

Author
Discussion

MEC

2,604 posts

273 months

Saturday 1st June 2019
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FredClogs said:
Is the 85k turnover threshold nett or gross of VAT?
net

sgrimshaw

7,323 posts

250 months

Saturday 1st June 2019
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Vixpy1 said:
Don't make the mistake I did thinking you can register for MTD then still do it the normal way for the last eligable return

Once youm register, it locks you out of the old system !
Assume at some point it will force me to register for MTD ....

Eric Mc

121,958 posts

265 months

Saturday 1st June 2019
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No. It is up to the reader to make the change. For most smaller VAT registered businesses, HMRC will be unable to tell from quarterly returns whether the business is
trading over the £85k threshold. They have also said they will apply a “light touch” to any penalties.

FredClogs

14,041 posts

161 months

Saturday 1st June 2019
quotequote all
MEC said:
net
Thanks.

sgrimshaw

7,323 posts

250 months

Sunday 2nd June 2019
quotequote all
Eric Mc said:
No. It is up to the reader to make the change. For most smaller VAT registered businesses, HMRC will be unable to tell from quarterly returns whether the business is
trading over the £85k threshold. They have also said they will apply a “light touch” to any penalties.
At the moment it's only asking people to register for the pilot.

Eric Mc

121,958 posts

265 months

Sunday 2nd June 2019
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The pilot should have ended on 1 April. The system is supposed to be compulsory from that date.

Clockwork Cupcake

74,518 posts

272 months

Sunday 2nd June 2019
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Eric Mc said:
The pilot should have ended on 1 April. The system is supposed to be compulsory from that date.
Indeed. It does seem rather odd to still refer to something as a pilot or Beta after it is compulsory. It doesn't exactly inspire confidence.

akirk

5,385 posts

114 months

Sunday 2nd June 2019
quotequote all
Clockwork Cupcake said:
Eric Mc said:
The pilot should have ended on 1 April. The system is supposed to be compulsory from that date.
Indeed. It does seem rather odd to still refer to something as a pilot or Beta after it is compulsory. It doesn't exactly inspire confidence.
As I understand it the first mandatory MTD periods start on the 1st April, so no mandatory MTD returns are required until after that period end at the end of this month...

therefore any current MTD returns are still in the pilot...

Eric Mc

121,958 posts

265 months

Sunday 2nd June 2019
quotequote all
akirk said:
As I understand it the first mandatory MTD periods start on the 1st April, so no mandatory MTD returns are required until after that period end at the end of this month...

therefore any current MTD returns are still in the pilot...
REGISTERING now should not be flagged as part of the pilot. Once you go past 1 April, all registrations fall within the compulsory period. It is grossly misleading to tell those REGISTERING now that they are in some sort of "pilot" scheme. They are not - and it typical of the crass ineptitude displayed by HMRC in this whole sorry saga.

Eric Mc

121,958 posts

265 months

Monday 3rd June 2019
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HMRC has announced that 2/3 of business who have applied for exemption for VAT MTD have done so on "Turnover" grounds. The stupid thing is, a business that is exempt from VAT MTD on turnover grounds is not required to apply for exemption from VAT MTD. They are automatically exempted.

They have also clarified that the definition of the £85,000 turnover threshold for VAT MTD exemption is different to the £85,000 turnover threshold for compulsory VAT registration.

As ever, it's not straightforward.

Clockwork Cupcake

74,518 posts

272 months

Monday 3rd June 2019
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Eric Mc said:
HMRC has announced that 2/3 of business who have applied for exemption for VAT MTD have done so on "Turnover" grounds. The stupid thing is, a business that is exempt from VAT MTD on turnover grounds is not required to apply for exemption from VAT MTD. They are automatically exempted.
Wait, hold on. I'm slightly confused by this statement. Are you saying that you can continue to run a VAT-registered business outside of MTD on turnover grounds, or are you saying that applying for exemption from MTD will de-register you for VAT?

Eric Mc

121,958 posts

265 months

Monday 3rd June 2019
quotequote all
Clockwork Cupcake said:
Eric Mc said:
HMRC has announced that 2/3 of business who have applied for exemption for VAT MTD have done so on "Turnover" grounds. The stupid thing is, a business that is exempt from VAT MTD on turnover grounds is not required to apply for exemption from VAT MTD. They are automatically exempted.
Wait, hold on. I'm slightly confused by this statement. Are you saying that you can continue to run a VAT-registered business outside of MTD on turnover grounds, or are you saying that applying for exemption from MTD will de-register you for VAT?
If you are VAT registered now but your 12 monthly turnover is less than the compulsory VAT registration threshold of £85,000, then you will not be required to switch to the new VAT MTD system. Once your turnover DOES exceed the £85,000 level, you MUST then switch to the new system. And once you are on the new system, you cannot go back to the old one, even if your turnover drops back below £85,000.

The problem is that some businesses that are trading below the £85,000 threshold think they have to specifically apply to HMRC NOT to submit VAT MTD returns. They don't. As long as they are trading below the £85,000 level, they can stay on the old system automatically.

The added complication is that this £85,000 threshold is defined a bit differently when you are using it to decide whether you should be VAT registered at all or when you are using it to see if you are exempted from VAT MTD.

sgrimshaw

7,323 posts

250 months

Monday 3rd June 2019
quotequote all
Apologies for asking this and not trying to find out the answer myself, but it's late.

Currently registered for VAT and have been since 2007, up until now turnover has been a mix of UK, European and Rest of World.

Going forward, there is unlikely to be much UK turnover (if any), maybe 10k PA European, so I guess we could deregisiter for VAT.

Consultancy business so nothing other than a bit of office expenses to reclaim VAT on.

Does this mean that we are exempt MTD as t/o is below £85k PA?

Edited by sgrimshaw on Monday 3rd June 22:25

Eric Mc

121,958 posts

265 months

Tuesday 4th June 2019
quotequote all
sgrimshaw said:
Apologies for asking this and not trying to find out the answer myself, but it's late.

Currently registered for VAT and have been since 2007, up until now turnover has been a mix of UK, European and Rest of World.

Going forward, there is unlikely to be much UK turnover (if any), maybe 10k PA European, so I guess we could deregisiter for VAT.

Consultancy business so nothing other than a bit of office expenses to reclaim VAT on.

Does this mean that we are exempt MTD as t/o is below £85k PA?

Edited by sgrimshaw on Monday 3rd June 22:25
If your correctly defined 12 monthly turnover is below £85,000, then you are not obliged to switch to VAT MTD. Just make sure that the turnover you are using to arrive at your "Under £85,000" amount is calculated under the VAT MTD criteria (which is a bit different to the Compulsory VAT Registration Threshold criteria.

AndyAudi

3,039 posts

222 months

Wednesday 5th June 2019
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Tried to register earlier this week to do April return (monthly) - deadline this week.

Got the message

“Unable to set you up because close to a busy period or Direct Debit payment

Please submit with old method, we will not fine you on this occasion

Come back & register before May return due”

akirk

5,385 posts

114 months

Wednesday 5th June 2019
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AndyAudi said:
Tried to register earlier this week to do April return (monthly) - deadline this week.

Got the message

“Unable to set you up because close to a busy period or Direct Debit payment

Please submit with old method, we will not fine you on this occasion

Come back & register before May return due”
I think that is something to do with Direct Debit legislation around numbers of days notice for DD etc. yet another thing not explained properly

AndyAudi

3,039 posts

222 months

Wednesday 5th June 2019
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akirk said:
I think that is something to do with Direct Debit legislation around numbers of days notice for DD etc. yet another thing not explained properly
We’ve had DD set up for years though, & 11/12ths of the time are actually in a repayment situation! Our 1/12th payment will Be next month so i’d better not cock it up with the new software!

plasticpig

12,932 posts

225 months

Thursday 6th June 2019
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AndyAudi said:
We’ve had DD set up for years though, & 11/12ths of the time are actually in a repayment situation! Our 1/12th payment will Be next month so i’d better not cock it up with the new software!
It's a different system though so they have to cancel the old mandate and create a new one. You need to sign up 15 days or earlier before the due date and you cant sign up for a period of 10 days after the due date.




Stay in Bed Instead

22,362 posts

157 months

Thursday 6th June 2019
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We went with taxcalc in the end.

Now passing through the HMRC MTD enrollment. It doesn't appear to be the pilot now, maybe because we had filed the last available return on the old system.

Elderly

3,492 posts

238 months

Thursday 6th June 2019
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Eric Mc said:
…...Just make sure that the turnover you are using to arrive at your "Under £85,000" amount is calculated under the VAT MTD criteria …….
Is that 12 month period from the start of THE tax year, or YOUR own tax year?