What is it?
Making Tax Digital (MTD) for VAT is the requirement for businesses to keep digital records and to prepare and submit their VAT returns to HMRC, using MTD compliant software.
Until April 2022, VAT registered businesses with an annual turnover of less than £85,000 could submit their VAT returns via an online account with HMRC.
However, from 1 November 2022, HMRC will be withdrawing that means of submission and forcing those businesses who have not yet signed up to MTD, to file their VAT returns using MTD compliant software.
Failure to sign up to MTD for VAT will result in businesses facing penalties for late submission as it will be impossible to file a VAT return any other way.
Who is it for?
All VAT-registered businesses without an agreed digital exclusion exemption with HMRC who are not already filing under MTD.
How does it work?
Once the online VAT portal closes, businesses without an exemption can only file VAT returns using MTD compliant software.
The online portal will remain open for those filing VAT returns annually until 15 May 2023.
What should I do next?
HMRC will be writing to those businesses that could be frozen out. However, with the deadline fast approaching, it would be advisable to take action now.
To sign up to MTD, you must:
Ensure you have MTD compliant software
Sign up for MTD for VAT via Gov.UK website
Authorise your software (once the registration has been confirmed)
Exemptions are available where it is not practical or reasonable for you to use computers, software or the internet. This could be because of age, disability, where you live or because you object to using computers on religious grounds.
If you believe you are eligible for an exemption, you are advised to apply as soon as possible. You risk facing penalties if the application for exemption has not been approved by 1 November 2022.
If you have any queries regarding the above or have any other questions relating to your VAT returns. Please do not hesitate to contact our Outsourcing Team.
First Published 31 August 2022
Last Updated 31 August 2022
31 August 2022
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