HM Revenue and Customs (HMRC) are reminding VAT-registered small businesses to sign up to Making Tax Digital for VAT from 1st of April 2022. This is the first step in HMRC’s plan to digitise the UK’s taxation system.
This month’s blog at SM Vint & Company explains how Making Tax Digital for VAT affects your business. For further advice, call us in Banbridge on 02840 662 490.
What is Making Tax Digital?
Also known as MTD, Making Tax Digital was first introduced in April 2019 for VAT registered businesses trading above the VAT registration threshold of £85,000. However, it is now being extended. This means that businesses currently exempt from the rules, due to being voluntarily registered and trading below the registration limit, will also have to comply.
The aim of MTD is for businesses to eventually go paperless. With digital tax, HMRC is trying to make it easier for businesses to get their VAT correct. HMRC expects many businesses to begin to use specialist accounting software. Furthermore, all businesses must actively register with HMRC for MTD, and can choose to voluntarily register before 1 April 2022 if they are ready sooner.
Test Your Business
Once your business has signed up, you are required to keep digital VAT records and use Making Tax Digital-compatible software to complete the following tasks:
- Updating your VAT records
- Generating new VAT returns
- Submitting new VAT returns to HMRC online
You will no longer be able to file VAT returns via the HMRC website and must use MTD-compatible software.
How Do I Register?
You can register your business online via the Government portal, using your Government Gateway login details. If you don’t already have a login, you will need to create a new account. However, if you have filed conventional VAT returns before, the chances are you already have a login. Additionally, SM Vint & Company can register your business on your behalf.
To submit your application for Making Tax Digital, you must provide the following:
- Your valid Government Gateway ID and password
- Your business’ VAT registration number
- The date of becoming a VAT-registered business
- The postcode of your primary business base
- The ‘Box 5’ figure listed in your latest VAT return
- The month your latest VAT return was submitted
- Your chosen MTD-compatible accounting software
Contact Our Team
If you’re feeling in the dark about Making Tax Digital for VAT, don’t hesitate to contact SM Vint & Company. We can offer you guidance and help make the transition easier. Call us in Banbridge on 02840 662 490. Alternatively, send us an enquiry via the contact form and we will be in touch.
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