Making Tax Digital for VAT-registered businesses: Are you ready?
HMRC is urging all VAT-registered businesses to sign up for Making Tax Digital for VAT before it becomes mandatory from 1 April this year.
Making Tax Digital for VAT is part of the overall digitalisation of UK tax. It is designed to help businesses eliminate common errors and save time managing their tax affairs.
In a recent independent study of over 2,000 businesses 69 per cent reported experiencing at least one benefit from Making Tax Digital. These included preparing and submitting returns faster and increased confidence that they were getting tax right.
Sixty-seven per cent of businesses also felt Making Tax Digital had reduced the potential for mistakes in at least one aspect of the record keeping, preparing and submitting returns process.
Since April 2019, businesses with a taxable turnover above £85,000 have been required to follow Making Tax Digital, keeping digital records and filing VAT returns using Making Tax Digital compatible software.
In July 2020 it was announced that all VAT-registered businesses must file digitally through Making Tax Digital from April 2022, regardless of turnover. HMRC is now reminding businesses below the £85,000 threshold of the steps which they need to take to be ready.
To sign up to Making Tax Digital VAT, businesses need to:
- Visit GOV.UK and choose Making Tax Digital-compatible software
- Keep digital records starting from 1 April 2022 or the beginning of their VAT period
- Sign up and submit their VAT return through Making Tax Digital.
If your Sandwell business isn’t yet signed up to Making Tax Digital for VAT, you can do so now to ensure you’re ready in time for the April deadline.
For help and support on how to sign up for Making Tax Digital visit GOV.UK. Agents can sign up on behalf of a business, although businesses remain responsible for meeting their VAT obligations. Those who do not join may be charged a penalty for failure to do so.