Posted 1 year ago by Alison
The next stage of the UK government’s plans for Making Tax Digital (MTD) come into effect on 1 April 2022. From this date, all VAT-registered businesses, regardless of income, must file VAT returns digitally through MTD.
Since April 2019, businesses with a taxable turnover above £85,000 have already been required to follow Making Tax Digital. From 1 April, this will also apply to those below the £85,000 threshold.
MTD is designed to help businesses eliminate common errors and save time managing their tax affairs. To comply, all VAT registered businesses must keep digital records starting from 1 April (or the start of their next VAT period), and they must use compatible accounting software, such as AccountsPortal, to complete their VAT returns through Making Tax Digital.
To find out more, read our What is Making Tax Digital? page.
According to HMRC, as of December 2021, nearly 1.6 million taxpayers had joined Making Tax Digital for VAT, with more than 11 million returns successfully submitted. In a recent independent study of over 2,000 businesses, 69% reported experiencing at least one benefit. This included preparing and submitting returns faster and increased confidence that they were getting tax right.
Businesses can sign up for MTD on gov.uk. To do this, you’ll need to have some relevant information to hand, including your Government Gateway ID and password, company registration number and UTR, and your VAT registration number.
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.
The government is urging businesses to prepare for MTD as soon as possible. They are particularly advising those that pay by direct debit not to sign up too close to the date their return is due as they may end up paying twice.
Some VAT-registered businesses may be eligible for an exemption from Making Tax Digital if it is not reasonable or practicable to use digital tools for their tax. If a business has previously been granted an exemption for VAT online filing, this will continue to be the case.
AccountsPortal is a registered software provider with HMRC, so by using AccountsPortal, you will comply with MTD regulations for your VAT returns. Find out how to register for MTD in AccountsPortal.
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