As the government continues to digitise the UK tax system and place new demands on businesses, we’re here to help you keep compliant and easily navigate any changes that might apply to you.
What’s Making Tax Digital?
Making Tax Digital (MTD) is a government initiative designed to make it easier for people and businesses to track their tax by keeping and submitting digital records.
Since 2019, VAT-registered businesses with a taxable turnover above the VAT registration threshold (currently £85,000) have needed to keep their records digitally and provide their VAT return information to HMRC through MTD-compatible software.
Here’s What’s Changing
In April 2022, a new stage will be introduced. MTD for VAT will apply to all VAT-registered businesses, regardless of turnover.
All VAT-registered businesses will be required to store their business records digitally and send their VAT returns to HMRC through MTD-compatible software. These changes are effective from a company’s first VAT return period starting on or after 1st April 2022.
For example, if you file your VAT returns quarterly and you have a VAT return period finishing on 30th April 2022, the first VAT return you’ll need to file through MTD is the one that finishes on 31st July 2022.
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