The next phase of Making Tax Digital for VAT is coming – are you ready?
The next phase of Making Tax Digital for VAT (MTDfv) is coming soon with an important extension to the rules from 1 April 2022.
On 1 April 2019, all VAT registered UK businesses (Inc. sole traders, landlords, trusts, partnerships, Limited companies and charities) with taxable turnover above the £85,000 VAT threshold were required to comply with the new MTDfV regulations.
This meant that these businesses needed to keep their business records digitally and make use of appropriate MTD-compatible software to submit their VAT Returns in line with HMRC’s MTD online filing regime.
Further changes to MTDfv from 1 April 2022
From 1 April 2022, the MTDfV rules will be extended to include ALL VAT registered businesses i.e. those businesses where the taxable turnover is less than £85,000.
It is estimated that these changes will apply to approximately 1.1 million VAT registered businesses that are not currently required to operate MTD for their VAT reporting and record keeping obligations.
Making sure you're ready for MTDfv
It may seem like April 2022 is a long way off, however time is moving quickly. It is important, not least for those who still need to move from a fully paper-based record keeping system to a digital one, to ensure you explore your MTD compatible software options as soon as possible to ensure you are compliant in good time.
Even if you are already using an accounting software package, it is still important to check it can comply with the digital reporting requirements of MTD.
For many small to medium sized businesses, using a cloud based accounting software package from leading providers such Xero, QuickBooks or Sage would ensure you are best placed to deal with the changes ahead as they are already set up to comply with the MTD functionality. Therefore, if you are not already using this type of software, you should explore the possibility of doing so.
We are here to help
With many of our clients already complying with the digital reporting requirements of MTD and utilising cloud accounting software, we are well-equipped to support you with your MTD for VAT compliance. Our certified cloud accounting advisors are also on hand to help you with your software selection, making sure you are using the most appropriate solution for your business now and in the future.
We will shortly be making contact with all our clients who will be affected by the MTDfv extension to confirm their current compliance status and ensure that they are able to plan ahead and prepare for the changes in good time.
For clients who are currently using our VAT services and support, our team will be reviewing their files and will get in touch with directly if there is any further action that you need to take.
In the meantime, if you have any queries or would like to know more about how we support you and your business going forward, please do not hesitate to get in touch.
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