From April 2022, Making Tax Digital for VAT will become mandatory for small businesses with taxable turnover below the VAT threshold. At present, that means those with a turnover below £85,000.
Introducing small businesses to MTD for VAT
To put it simply, Making Tax Digital for VAT is part of HMRC’s ambition to become a digitally advanced tax administration and close the gap on lost tax revenue due to avoidable errors.
The system requires businesses to keep their records in digital format and file their VAT returns using compatible software like MTDfVAT.
Key terms
Digital record-keeping means that your business information and data on your supplies must be held digitally.
Digital links are where data is communicated between systems electronically, without the need for manual intervention such as typing in figures or using copy and paste.
MTD for VAT returns are submitted using the software so that you do not manually transfer the VAT totals to HMRC.
Bridging software like MTDfVAT is a valid method to send your VAT returns to HMRC. It is a fantastic way to save on setup and ongoing costs as it can work with your existing bookkeeping software or allow you to use Excel to keep digital records and create your VAT totals.
Affordable quality
We’ve been helping our customers with their MTD for VAT returns since the initiative was introduced. Our support team is highly praised for their efficient assistance and ability to guide our customers through the Making Tax Digital process.
“Perfect. Thank you so much for the speedy response.” Andrew
“All sorted. Thank you very much for all your help and your swift replies. It has been much appreciated.” Daniel
Get started
If there’s one key lesson we’ve learned from the introduction of MTD for VAT, it’s that businesses who prepare early find the transition much easier.
Signing up now means that you have time to get used to the system without the looming threat of penalties. It gives you a chance to iron out your processes before Making Tax Digital for VAT becomes mandatory.
To make preparing for MTD for VAT even easier, we provide an Excel template for digital record-keeping and digital transfer into the MTDfVAT portal.
Find out more about the process over at gov.uk. The first step is signing up for compatible software. Click the button below to find out more about purchasing MTDfVAT.