Less than one week to go before MTD (Making Tax Digital) for VAT is mandatory.
As of 1st April 2022 VAT registered businesses will need to submit VAT returns via MTD software.
It is said that this will reduce common mistakes and save time for taxpayers whilst being a key part of the digitalisation of UK tax system.
Research conducted by HMRC suggests that for 2019 and 2020 MTD’s generated increased revenue through reducing submission errors.
Nearly 1.6 million taxpayers had joined MTD for VAT as of December 2021, with over 11 million returns successfully submitted.
VAT-registered businesses that have not yet signed up to MTD for VAT should do so now. All VAT-registered businesses must use MTD for VAT for their first VAT return starting on or after 1 April 2022. Businesses should use the time left to choose the software that is right for them, whether that is one of the simple free options available, or a more advanced product for those with more complex affairs.
There is a range of support and information available for those that need it – including accessible online content such as YouTube videos, GOV.UK help pages and HMRC’s Extra Support service.
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.
Already exempt from VAT online filing?
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 whether an exemption may apply.
How to sign up for MTD
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
For further MTD advice contact AJR & co Ltd