Since Making Tax Digital came into play in April 2019, VAT-registered businesses in the UK above the £85,000 registration threshold are required to submit their VAT returns using ‘functional compatible software’ and store their VAT accounting records digitally. This is part of the government’s plans to make the tax system more resilient and effective, to boost business productivity and to support taxpayers.
As of 1st April 2022, all VAT registered businesses will be required to comply with the “Making Tax Digital” MTD regime for their VAT accounting.
This will affect around 1.1m UK businesses that are registered for VAT with taxable turnover below the current threshold of £85,000. These businesses may not have considered MTD for VAT before now. As the deadline is fast approaching, we have created an MTD checklist to help businesses get themselves up to speed with MTD for VAT ready for the April 2022 deadline.
Accountant Services MTD Checklist
Will you be impacted by MTD for VAT in April 2022?
If your business is currently VAT registered, then using Making Tax Digital for VAT will be a requirement for your business as of April 2022. You will need to follow the MTD for VAT rules for the first full VAT period that falls after the 1st of April and then all subsequent ones.
It is important to ensure that you are keeping digital records for VAT and if you are using more than one piece of software then they must be digitally linked.
The force felt by MTD for VAT in April 2022 for VAT registered businesses below the threshold is likely to be less impactful if you are currently using cloud accounting software and could involve no more than signing up for MTD for VAT via the HMRC MTD Portal and then activating the feature in your software, or you can speak to your Accountant Services Adviser who will be able to help activate MTD for VAT for your business.
Are you using spreadsheets or other manual records to prepare your VAT return? Then you will need to consider ways to replace the existing process with a software driven approach for recording VAT details and filing VAT returns.
Who is entitled to claim exemptions and deferrals from MTD for VAT?
If you are a business that is considered digitally exempt then you may be able to claim exemption from MTD for VAT. Those that are digitally exempt include people with religious beliefs that are not compatible with the requirements, or people whose age, disability or remoteness means it is not reasonably practical for them to use digital tools.
How Accountant Services can help
If you would like more information on MTD for VAT, our expert team are on hand to guide you through the switch
We offer a range of services to support our clients, including:
- Preparing the accounting records and VAT returns, if required.
- Reviewing VAT returns prepared by our clients, prior to them being submitted to HMRC.
- Advising on the options available for digital record keeping and the best solution for your business including software set up and training, if required.
- Reviewing your accounting records to ensure you will be compliant from 1st April 2022.
- Completing VAT return submissions on your behalf using our bridging solution.
- Advising on exemption from MTD, and applying to HMRC on your behalf if applicable.
