Are you ready? MTD for VAT is coming

Making Tax Digital (MTD) will become mandatory for all VAT registered businesses from 1st April 2022. We have urged all clients to take steps to prepare for the deadline.

Businesses need to have signed up to MTD for their first VAT return starting on or after 1 April 2022. They may not be required to make their first submission via MTD until Summer 2022.

MTD for VAT is part of the overall digitalisation of UK Tax. It is aimed to help businesses eliminate common errors and save time managing their tax affairs.

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.

For details on what records must be kept digitally from 1st April 2022  contact us or visit here.

To sign up to Making Tax Digital VAT, businesses, or an agent on a businesses’ behalf, need to:

1. select a compatible software that meets their businesses needs
2. keep digital records starting from 1 April 2022 or the beginning of their VAT period
3. sign up and submit their VAT Return through Making Tax Digital

Businesses will experience costs in joining MTD by introducing compatible software, such as Xero, Sage or QuickBooks. Contact us today for advice on which software would be best for you and your business.

Some VAT registered businesses may be eligible for an exemption. If a business has previously been granted an exemption for VAT online filing, this will carry over to Making Tax Digital VAT requirements. Information on how to apply for an exemption is available on GOV.UK.

If you would like any assistance on becoming compliant please contact us.