Tuesday, March 19, 2024

Making Tax Digital for VAT is coming – are you ready?

Businesses are reminded to take steps to prepare for Making Tax Digital (MTD) for Value Added Tax (VAT) before it becomes mandatory for all VAT-registered businesses from 1 April this year.
MTD is designed to help businesses eliminate common errors and save time managing their tax affairs.

MTD for VAT is part of the overall digitalisation of UK Tax. In a recent independent study of over 2,000 businesses, 69% reported experiencing at least one benefit from MTD. These included preparing and submitting returns faster and increased confidence that they were getting tax right. Sixty-seven percent of businesses also felt MTD had reduced the potential for mistakes in at least one aspect of the record keeping, preparing, and submitting returns process.
As of December 2021, nearly 1.6 million taxpayers had joined MTD for VAT with more than 11 million returns successfully submitted. Around a third of VAT-registered businesses with taxable turnover below £85,000 have voluntarily signed up to MTD for VAT ahead of April 2022, and thousands more are signing up each week.

Since April 2019, businesses with a taxable turnover above £85,000 have already been required to follow MTD, keeping digital records and filing VAT returns using MTD compatible software.
In July 2020 it was announced that all VAT registered businesses must file digitally through MTD from April 2022, regardless of turnover. HMRC is now reminding businesses below the £85,000 threshold of the steps which they need to take to be ready.

To sign up to MTD VAT, businesses, or an agent on a businesses’ behalf, need to:
Step 1: Visit GOV.UK and choose MTD-compatible software
Step 2: Keep digital records starting from 1 April 2022 or the beginning of their VAT period
Step 3: Sign up and submit their VAT Return through MTD.

If businesses have not yet signed up to MTD for VAT, they should do so now to ensure they are ready in time for the April 2022 deadline.
Joanna Rowland, Director General for Transformation Group in HMRC, said: “MTD is fundamental to the delivery of a trusted and modern tax system, making it easier for businesses to get their tax right and supporting the UK to go digital.

“By signing up for MTD, we expect most businesses to experience long-term benefits, including reduced errors and time saved in managing their tax affairs.
“We encourage businesses to explore digital record-keeping for their VAT affairs and use this time to choose the right software to support their business needs.”

FSB National Chair, Mike Cherry, said: “We have worked hard to ensure Making Tax Digital launch dates were adjusted to give small businesses more time to prepare and allow more competition to open up in the accounting software market. It’s important that firms do all they can to get ahead of deadlines and access the affordable platforms that are now available; if they are members of FSB, they will have access to a new easy MTD member service that we are creating.

“We’ll continue to work with government, and through our support services, to minimise the admin and cost impacts of MTD on small firms whilst unlocking the productivity gains the initiative could bring.”
Businesses can find help and support on how to sign up for MTD on GOV.UK. Agents can sign up on behalf of a business, although businesses remain responsible for meeting their VAT obligations. Those who do not join may be charged a penalty for failure to do so.

For businesses who need help and support on signing up for MTD, HMRC is running a series of webinars. More information can be found on HMRC’s MTD help page.
We recognise that some businesses will experience upfront costs in joining MTD. There are a range of compatible software products available for MTD for VAT, allowing businesses to choose which tools they use to run their business and tax affairs.

Some VAT-registered businesses may be eligible for an exemption from MTD, if it is not reasonable or practicable for them to use digital tools for their tax.
If a business has previously been granted an exemption for VAT online filing, this will carry over to MTD VAT requirements. Go to GOV.UK for more information on how to apply for an exemption.

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments

Stay Connected

257FansLike
120FollowersFollow
1FollowersFollow
1,173FollowersFollow
- Advertisement -

Please Donate

The Hockley Flyer magazine if entirely funded by the advertising, but we could always do with a little bit more funding. The advertising not only pays for the design/printing, but also postage, delivery, all the associated paperwork/accounts, and research for the Heritage section. Our subscribers pay only a bit more then the postage/mailing costs, and the magazines are free - no cover price.



Subscribe to News Digest

Oh hi there 👋
It’s nice to meet you.

Sign up to for awesome content in your inbox with latest updates in a daily digest.

We don’t spam! Read our privacy policy for more info.

Latest Articles

0
Would love your thoughts, please comment.x
()
x