There is new legislation from HMRC – Making Tax Digital (MTD) for VAT. This is a part of their plan to digitise the entirety of tax for businesses in the UK. It currently applies to VAT registered businesses with VATable sales above the current annual threshold (£85,000).
Businesses who meet the criteria have to keep digital records. In addition, they must file VAT returns digitally using compatible software. For most companies, this applies for VAT periods that either started on or after 1st April 2019.
There are approximately a million enterprises that need to submit VAT returns using the new system. We understand that tax legislation can appear intimidating. But, with our helpful checklist, you will soon be complying with the rules.
Register and get compatible software
Unless you already have, you will need to register for Making Tax Digital. It is easy to do this through the HMRC website. Keep in mind that you won’t automatically be registered; you must do it yourself. Then, connect your HMRC account and chosen software.
Don’t be complacent
It is important that VAT-registered businesses with sales that are VATable above £85,000 comply with the new legislation. HMRC has come out and said that it will be lenient in terms of penalties while businesses are transitioning to this new filing system. This will give everyone time to organise everything.
Enjoy the benefits
It might be a bit of work to switch over to this new system but there are long-term gains waiting. It won’t be long before you are fully compliant with Making Tax Digital and able to file VAT returns quickly and efficiently. You can also enjoy a clearer picture of business performance that comes with having up-to-date accounts.
Need an accountant?
The rules might not affect you now but it is important you stay on top of your accounting. If you ever need help from a top notch accountant, you have come to the right place. Accountancy is a directory for the UK that is full of accountants with different specialities. Check it out and get in touch if you have any questions about how it all works.