Date posted: 27th Sep 2022
The march of HMRC’s Making Tax Digital programme continues and is one step closer to quarterly profit reporting.
For now however, all VAT-registered businesses should already have signed up to Making Tax Digital (MTD) for VAT, and be using MTD-compatible software to keep their VAT records and file returns in a digital format.
From Tuesday 1st November 2022, businesses who have an existing VAT online account will no longer be able to access this. Businesses that file annual VAT returns will still be able to access their VAT online account until 15 May 2023.
If you fail to sign up for MTD, you may have to pay a penalty. The best way to ensure you do not have to incur this, is to start using MTD now!
So, how do you sign up to MTD?
There are a number of steps you must follow if you haven’t signed up yet:
- Choose a MTD-compatible software that’s right for your business. Nobody knows your business more than you, but choosing the best software can be tricky, however, my experienced team and I are here to help you choose and implement the right option for you.
- Check the permissions in the software and ensure that VAT returns can be filed easily.
- Keep digital records for your current and future VAT returns – there is a handy list of what records need to be kept on GOV.uk.
- Sign up for MTD and file your future VAT returns using MTD-compatible software.
As with most HMRC procedures, there are some exemptions. Exemptions in this field are typically due to it being unreasonable or impractical, for you to use computers or select software. There are some other circumstances, for example if your business is subject to an insolvency procedure, then you are automatically exempt. In practise the process is relatively easy to comply with given the right assistance.
You can check if you are eligible for an exemption on GOV.UK. HMRC will consider each application on a case-by-case basis.
If you need any help with any stage of Making Tax Digital or would like to discuss MTD compliant software options then contact us here.