On the 1 April 2019, HMRC introduced their first phase of the Making Tax Digital (MTD) rules. These required VAT-registered businesses, with taxable turnover above the VAT threshold of £85,000, to submit their VAT returns via MTD-compliant software rather than the Government Gateway. HMRC’s reasoning for introducing these rules was to help businesses eliminate common errors and save time managing their tax affairs, with the overall goal of digitalising the UK tax system, including income tax, from April 6, 2024, and corporation tax, from 2026 at the earliest.
Victoria, Director at The Business Hut, discusses this further - "What hasn't been discussed as much is the move for MTD for VAT to apply to businesses below the £85k turnover threshold to also take part."
According to HMRC in January 2022, only around a third of VAT Registered businesses below the £85k turnover have voluntarily signed up to Making Tax Digital. And with only 1 month remaining until MTD VAT that leaves two thirds of businesses to be compliant.
1. Choose MTD compliant software
2. Keep accounting records digitally from the 1 April 2022 or the beginning of their VAT period if their previous VAT period crosses over the April 1, 2022
If you are a business owner who needs to be compliant with the MTD regulations from 1st April 2022, but is not currently, then don’t worry. You are not alone. Thousands of others are in the same position. Get in touch with one of our team and we'd be happy to guide you through the process quickly and without stress to ensure that you are compliant from April.