As Making Tax Digital for VAT (MTD) rolls out, it is important that businesses are aware of changes to VAT Notice 700/22 Making Tax Digital for VAT. This is updated on an ongoing basis as HMRC issues further guidance.
Significant recent updates include a relaxation of the rules on petty cash transactions. Petty cash transactions may be entered in batches, with just summary totals entered in the digital records. This applies to individual purchases where the value is less than £50 (including VAT). There is a £500 (VAT-inclusive) maximum for each entry.
There is another relaxation for businesses which would usually enter totals from supplier statements in their accounting records, rather than individual invoice totals. The relaxation means that where all supplies on a statement relate to the same VAT period, and the total VAT charged at each rate is shown, a business can record totals from the supplier statement, rather than individual invoices, in the digital records: though cross referencing outside the digital records will also be required.
We are happy to help your business adapt to MTD requirements.
This publication has been prepared by RRL LLP. It is to be treated as a general guide only and is not intended to be a comprehensive statement of the law or represent specific advice. No liability is accepted for the opinions it contains, or for any errors or omissions. All rights reserved.