All VAT-registered businesses, regardless of turnover, must now follow the Making Tax Digital rules. This means keeping VAT records digitally and using software to send VAT returns.
Making Tax Digital (MTD) aims to create a more efficient process for businesses and individuals to declare tax to HMRC. The new legislation means, HMRC legally requires VAT-registered businesses to record transactions digitally and submit VAT returns to HMRC using the correct accounting software.
This article will cover the following points:
- When is the VAT MTD Deadline?
- Who does it apply too?
- How Do I Register?
- Will This Change My VAT Return Deadline?
- Where Can I Find Compatible Software?
When is the VAT MTD deadline?
VAT-registered businesses with a taxable turnover above the VAT threshold, have been required to follow MTD rules since April 2019. This legislation is already active and all businesses should be complying, however there is an estimated 600,000 businesses still not complying. Businesses who are yet to sign up could face late payment penalty fines. Meaning this should be at the forefront of any VAT registered business owners mind.
Who does it apply too?
From April 2022 the new legislation applies to all VAT registered businesses. Regardless of taxable turnover, unless HMRC have agreed to an exemption.
How do I register?
There is a sign-up process that you must follow on the GOV.UK website when registering for Making Tax Digital for VAT. There are various steps you will need to complete to sign up so have all of your personal and business information ready. Once you have signed up you will not need to sign up again should your turnover drop below the VAT registration limit, unless you have cancelled you VAT registration all together.
Will this change my VAT return deadline?
Your VAT return deadlines will not be affected by the new rules, or the information you need to submit to HMRC. You can check when your next return is due on your online VAT account.
Where can I find compatible software?
Here at Onyx we are accredited partners with a range of software packages. Our team are available to help support you and give training sessions at your convenience. We are accredited partners with: Dext, Kashflow, Xero, Quickbooks, and Sage.
GET IN TOUCH WITH ONYX
Have any questions about VAT? If you have any queries regarding information in this article, or want to discuss further, please give us a call or e-mail us at enquiries@onyx.accountants for a FREE no obligation consultation.
