It’s all change once again with VAT reporting. From April 2022 Making Tax Digital (MTD) is extended. It will apply to all VAT-registered businesses. Therefore, we recommend that you prepare now. It’s time to get ready for Making Tax Digital VAT changes.
If you are VAT-registered, Making Tax Digital will affect you. Even if your business turnover is below the £85,000 threshold. Some 1.1million businesses not currently required to operate MTD for VAT reporting will have to sign up.
Making Tax Digital VAT changes
Making Tax Digital will change the way you keep records. It means using dedicated software to submit your returns. The transition will be easier if you’re well-organised. There will be time to get used to the software.
Key MTD benefits
This MTD extension is part of the government’s 10-year strategy. The aim? To make the UK tax system more resilient and effective. There are numerous benefits. Such as reducing or eliminating paper-based or manual processes. Ultimately, the new rules will ensure an integrated approach to business administration and tax.
The Making Tax Digital VAT changes will improve accuracy. Quite simply, tax return errors will be less likely. In particular HM Revenue & Customs (HMRC) expects fewer careless mistakes.
Implementing these Making Tax Digital VAT changes means it will be easier to get tax right. You will spend less time on administration. Consequently, you can focus on new opportunities. Concentrate on productivity. And take action to drive profitability. Already, around a quarter of VAT-registered businesses with revenue below the £85,000 threshold have voluntarily signed up to MTD.
Essentially, Making Tax Digital requires businesses to keep digital records. This means using third-party software. It facilitates compliance with your VAT obligations. As a result, submitting returns to HMRC will be easier.
The software generates and sends returns directly. Of course, it must meet certain standards. Specifically, the software you choose must be able to receive information from HMRC digitally via its Application Programming Interface (API) platform.
Information and assistance
The GOV.UK website has full details about the Making Tax Digital VAT changes.
Don’t leave it until the last minute. If you need help, get in touch. Our tax team is offering a free, no obligation consultation. Call our experts on 01785 243276 or email firstname.lastname@example.org