Making Tax Digital for VAT
Over recent years we’ve been working closely with our VAT-registered clients to get them ready for Making Tax Digital (MTD) for VAT. The deadline (of 1 November 2022) has now passed and businesses are no longer able to use their existing VAT online account to submit VAT returns. By law, VAT-registered businesses must now use MTD compatible software for their VAT returns.
MTD for VAT applies to companies, as well as sole traders and partnerships. Charities and not-for-profit organisations are also included – as this new system captures any legal entity that is VAT registered and trading above the threshold.
According to HMRC, MTD’s aim is to help businesses get their tax right first time by reducing errors, making it easier for them to manage their tax affairs by going digital, and consequently helping them to grow. HMRC reports that more than 1.8 million businesses are now using the service and more than 19 million returns have been successfully submitted through MTD-compatible software so far.
If businesses do not file their VAT returns through MTD-compatible software, they may have to pay a penalty. Even if a business currently keeps digital records, they must check their software is MTD compatible and sign up for MTD before filing their next return.
If you are launching a new business and you register for VAT through HMRC’s VAT Registration Service, you will automatically be signed up for MTD.
If you’ve got any questions or need any help, please call our team on: 01892 513515 or email: info@lewisandco.biz