DID you know, as part of HMRC’s ongoing plans, the Making Tax Digital (MTD) programme is being extended to all VAT registered businesses.

If your business earns less than £85,000 and is voluntarily VAT registered you now also need to follow the rules by keeping records digitally.

The first stage of the initiative rolled out from April 2019 which stated that all VAT registered businesses above the mandatory £85,000 turnover threshold were required to move to a digital MTD compliant solution.

From April 2022, all VAT-registered business in the UK will need to use MTD compliant software to keep digital records and make VAT submissions to HMRC. This means that from this date, all VAT registered businesses must sign up, whatever they earn. For the vast majority of businesses this applies to accounting periods that started on or after 1 April 2019.

What are you required to do?

To be MTD compliant, you will need to review how you currently maintain your VAT records, and it will no longer be possible to submit VAT returns manually via HMRC’s website for your first full VAT period following April 2022.

As a business you will need to be able to:

• Process and keep records in a digital form

• Use MTD compliant software to create and submit a VAT return from the digital records

• Provide HMRC with VAT data on a voluntary basis.

Benefits of moving to an MTD compliant solution:

• Get support every step of the way on your digital accounting journey.

• The team get to know you and your existing processes, pain points and future needs to design your tailored solution.

• They will revolutionise processes, potentially eliminating hours of manual processing.

• You get access to the latest accounting software that is MTD and HMRC compliant.

* James Fry is director of cloud accounting, at Garbutt + Elliott. The specialist team can help you move to a MTD compliant solution by converting to the cloud, resulting in a more efficient, automated finance function. Get in touch with support@garbutt-elliott.co.uk