As part of the Making Tax Digital programme, from April 1, VAT returns will need to be submitted directly using software compatible with HMRC’s digital platforms. One concern is how the required software will manage margin scheme claims. Art market accountant Catherine Thompson, director of Rawlinson & Hunter, told ATG she was “not aware of any specific software in place currently that deals with margin scheme VAT calculations”.
However, HMRC will “allow such adjustments to be performed outside the software and to be entered into the software manually,” she said.
Professional sellers of antiques and works of art pay VAT on the difference between what they paid for an item and what they sell it for, rather than the full selling price.
Thompson advised dealers to talk to their accountants or contact their accounting software supplier as soon as possible to ensure they are in time for HMRC’s deadline.
HMRC will allow exemptions to digital reporting based on age, disability or remoteness of location “if impractical”, Thompson said, but firms need to apply to HMRC in advance.
Marco Forgione, BADA chief executive, said he had alerted HMRC on “the specific needs of the sector”.