Making Tax Digital for VAT requires you to maintain digital VAT data and submit VAT returns utilizing compliant software program. Failure to take action might lead to penalties.
However don’t fear if you happen to’re feeling unsure or cautious in regards to the coming adjustments. Simply comply with these six easy suggestions and also you’ll be prepared for MTD for VAT.
1. Verify the deadlines for your corporation
You want to concentrate on 3 separate deadlines for MTD for VAT.
- Following the principles – you should begin protecting digital data from the primary full VAT interval that begins after 1 April 2022
- Signing up – to keep away from overlap with the prevailing system, you should join MTD for VAT both seven days earlier than your first return is due or 5 days after your first return is due
- Submitting your first return – your first quarterly return should be submitted one month and 7 days after the top of the VAT quarter at the very least (e.g. by 7 October 2022 for VAT interval starting 1 March
2. Select MTD-compliant software program
You’ll want to already be utilizing MTD-compliant accounting software program to be able to register for MTD for VAT. Ask your software program provider or verify the HMRC web site if you happen to’re not sure.
3. Ask your accountant
Your accountant is your greatest useful resource on the subject of MTD for VAT. They’ll be very conversant in the method after the primary wave of onboarding in 2019, and can be capable to provide you with tailor-made recommendation on tips on how to put together and make MTD for VAT be just right for you. You might also be capable to hyperlink your accounting system to theirs to present them quick access to important information.
4. Educate your workforce about MTD for VAT
MTD for VAT impacts all of your accounting processes and any workers concerned in these processes. From buying to gross sales and finance, make sure that everybody in your organisation is able to adapt to digitisation. Group leaders can learn HMRC’s VAT Discover 700/22 and be answerable for making certain compliance throughout their departments.
5. Put together for the subsequent phases of MTD
MTD for VAT is simply the beginning of HMRC’s plan to digitise the tax system.
From April 2024, sole merchants and landlords with earnings over £10,000 per 12 months must adjust to MTD for Earnings Tax. From 2025, it would additionally apply to common partnerships. Then, in April 2026, MTD for Company Tax will likely be launched.
These dates may appear a good distance off, however the extra work you do now to organize your processes, the simpler it will likely be to adapt to MTD for Earnings and Company tax after they finally arrive.
6. Verify whether or not your corporation has to conform or not
HMRC will think about distinctive circumstances as a legitimate purpose for exemption from MTD for VAT, corresponding to incapacity to make use of a pc or go surfing as a result of a incapacity or faith, or residing someplace so distant that there’s no web connection.
When you assume you fall into this class, you’ll have to name the HMRC helpline and make your case for exemption to buyer help. They’ll think about your private circumstances and decide primarily based on the information.
What subsequent?
When you comply with the above steps, you don’t have anything to fret about with MTD for VAT. HMRC’s purpose is simply to make the tax system fairer, simpler, and extra clear for all.
When you’re nonetheless not sure, otherwise you need extra recommendation and steerage, you’ll find loads of info on Sage’s Making Tax Digital hub.
This text was written as a part of a paid-for content material marketing campaign with Sage
Learn extra: Easy methods to use MTD to get VAT proper
