Hexham-headquartered Hansen Partnership acquired by Navint
November 23, 2021
Making Tax Digital (MTD) for VAT will be extended to all VAT-registered businesses from next April, businesses have been reminded.
HM Revenue & Customs (HMRC) wrote to thousands of businesses this month advising them to prepare to transition to the new digital tax system.
From 1 April 2022, MTD for VAT will be made mandatory for almost all businesses, rather than just those whose turnover exceeds the VAT registration threshold (currently £85,000).
Those who file quarterly VAT returns but do not use MTD for VAT (around two-thirds of businesses) will receive letters in November and December reminding them of their obligations, as well as how to prepare.
This may include trialling MTD-compliant software, such as Xero or QuickBooks, or migrating to a cloud-based storage system. HMRC has published the following list of accounting software providers who currently have MTD-compatible software here.
Under MTD for VAT, businesses are required to keep digital records of VAT transactions, as well as any VAT accounting schemes used, and submit digital VAT returns.
If you cannot use MTD for VAT, you may be able to apply for a digital exclusion exemption.
For help and advice with related matters, please get in touch with our team today.