Making Tax Digital for VAT – April 2022

Get Ready – Making Tax Digital for VAT – Phase 2

 

HMRC are rolling out the next stage of their Making Tax Digital (MTD) strategy (digital record keeping and on-line reporting).

UK businesses with taxable turnover above £85,000 have been operating MTD since April 2019.

From April 2022 all VAT registered businesses (including the self-employed & landlords) will need to file VAT Returns through the MTD system.

 

Will this affect my business?

Yes, if you are:

  • VAT registered
  • run a small business (taxable turnover less than £85,000) and
  • haven’t already moved to MTD for VAT.

 

When will I need to start using MTD for VAT?

From your business’s first VAT accounting period commencing on or after 1st April 2022.

 

What do I have to do?

  • Review the method of record keeping currently used. Research your software options.

You may need to change the way you are recording your transactions e.g. start using third party software etc.

Talk to us first as there are recommended cost effective solutions.

  • Sign up to MTD VAT at the right time.
  • Diarise the VAT Return key dates.
  • If you pay your VAT by direct debit then sign up
    • at least seven days before the first MTD return is due; but
    • at least five days after the last non-MTD return is due.

Signing up too close to the date the return is due can result in duplicate payments being collected.

If the business does not pay by direct debit, it should sign up at least three days before the first MTD VAT return is due.

 

Do I have to sign up to MTD for VAT?

Yes, ordinarily, but you may be able to qualify for a digital exclusion exemption because:

  • of your age, a disability or where you live.
  • you object to using computers on religious grounds.
  • of any other reason why it’s not reasonable or practical.

HMRC will consider each application on a case by case basis.

 

The Positives

Although it may feel as though this is yet another layer of compliance and complexity the overwhelming response we are receiving from clients that have been through the process is very positive.

 

We are here to help

We have significant experience in advising & assisting clients in transferring to MTD and migrating to digital record keeping.

If you have any questions, or require assistance, then please contact us – accounts@enhance-professional.co.uk