Making Tax Digital (MTD) – VAT

For our article regarding MTD for Individuals and Landlords, click here.

Making Tax Digital was introduced to all VAT-registered businesses with turnovers of over £85,000.00 in April 2019. It required them to submit their VAT returns through MTD-compatible software and digitally store their VAT accounting records.

From 1 April 2022, as part of HMRC’s ongoing expansion of their tax digital plan, all VAT-registered businesses will need to be compliant.

What does this mean?

As of 1 April 2022 if you run a UK business and it is VAT registered you will be required to

  • File your VAT returns through MTD-compatible software – It will no longer be possible to submit them via HMRC’s website.
  • Digitally maintain your VAT records for a six-year period
  • Where you are using different software to maintain different records, ensure that they are all linked so that the information passes between them digitally.
  • Registering for MTD does not change your filing period, nor the filing or payment dates.

What to do now ?

If you are one of those businesses that are not yet subject to the MTD rules and have not yet registered. You will need to do so before 1 April 2022 as HMRC will not automatically transfer individuals/businesses across.

The timing on this is essential to avoid any double payment on your first MTD return. Registration must be at least five days after the last non-MTD VAT return deadline date and no less than seven days before the first MTD VAT return deadline.

At Hawthorne Tax Consultancy, we can digitally file VAT returns on behalf of our client’s businesses.

We can even sign your business up to Making Tax Digital – removing all the hard work of dealing with HMRC. Additionally, we can set you up with a cloud-based accountancy platform to ensure that all the necessary VAT accounting records and submissions are stored correctly.

If you would like to know more about MTD for VAT or any of our other services, don’t hesitate to contact us today.

All information provided in this article is for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant. It should in no way be considered as advice provided by Hawthorne Tax Consultancy or any of its principals. All information is deemed to be correct at the time of writing.