Now’s the time to get to grips with MTD for VAT for small businesses – and it need not be a headache. Making Tax Digital comes into effect from April 2021 for small businesses – those with a taxable turnover below the VAT threshold. Over the coming weeks, we’ll be drawing on our experience of helping many businesses with their VAT software to introduce you to the essential facts, starting with why it’s a good thing for businesses of all sizes.

Why Making Tax Digital?

HMRC says that currently £9bn is lost each year to avoidable errors. MTD for VAT is the start of the initiative to reduce that gap by creating a digital link between a business’ records and the HMRC system.

There are other benefits that directly influence small businesses:

  • The most digitally advanced businesses in the UK save one day every week in administration time (Lloyds Bank UK Consumer Digital Index 2019)
  • Micro-businesses using software see an 11.8% improvement in productivity (Enterprise Research Centre)

Making Tax Digital benefits your small business

The benefits of Making Tax Digital to small businesses lie in both efficiency and accuracy.

As a small business owner your time is precious, and setting up early for MTD for VAT will help you reap the rewards. MTD for VAT means that you must keep the details of your business and any supplies made or received in digital form. There is no need for expensive outlay – a simple spreadsheet and bridging software will enable you to complete your VAT returns for as little as £50 a year.

And accurate records mean accurate returns – you save money by only paying what you owe in VAT and avoiding errors that could lead to penalties.

How you can get to grips with MTD for VAT

While April 2022 seems far off, our experience so far has shown that businesses that prepare early have a far easier time when the switch becomes mandatory.

To make it easy on you, MTDfVAT comes with a template spreadsheet for digital record keeping and an add-in for Excel so you can transfer your data from your spreadsheet to HMRC in just a few clicks.

It also links with bookkeeping systems so if you’ve already got a digital record-keeping method in place MTDfVAT can help!

Starting now means you have plenty of time to establish and tune your processes before penalties come into the picture.

Want to see more?

Take a look at our quick tutorial to see how simple Making Tax Digital is with MTDfVAT and Excel:

 

Are you ready to get to grips with MTD for VAT?

You can purchase MTDfVAT from our online shop. You get outstanding email support and a free Excel VAT spreadsheet to help you start with your digital journey.

If you have any questions ahead of purchase we’re here to help. You can email sales@mtdfvat.co.uk with any queries.