BUSINESS have less than a week to take action before key tax changes come into force on April 1, HM Revenue and Customs warned.

All VAT-registered businesses must use making tax digital (MTD) for VAT for their first VAT return starting on or after April 1, 2022.

MTD helps taxpayers get their tax returns right by reducing mistakes and saving time managing their tax affairs.

Evidence shows MTD is reducing errors, while making it faster to prepare and submit returns, and boosting productivity for businesses.

Nearly 1.6 million taxpayers had joined MTD for VAT as of December 2021 with more than 11 million returns successfully submitted.

About a third of VAT-registered businesses with taxable turnover below £85,000 have voluntarily signed up to MTD for VAT.

Businesses are being urged to use the time left to choose the right software for them - one of the simple free options available, or a more advanced product for those with more complex affairs.

Agents can sign up on behalf of a business, although businesses remain responsible for meeting their VAT obligations.

Those who do not join may be charged a penalty.

There are a range of compatible software products available for MTD for VAT, allowing businesses to choose which tools they use to run their business and tax affairs.

A list of software compatible with MTD for VAT, including free and low-cost options, can be found on GOV.UK

HMRC is running a series of webinars for those who need more help and support on signing up for MTD.

Some VAT-registered businesses may be eligible for an exemption from MTD, if it is not reasonable or practicable for them to use digital tools for their tax.

If a business has previously been granted an exemption for VAT online filing, this will carry over to MTD VAT requirements.

What to do next:

To sign up to MTD VAT, businesses, or an agent on a businesses’ behalf, need to:

Step 1: Visit GOV.UK and choose MTD-compatible software

Step 2: Keep digital records starting from 1 April 2022 or the beginning of their VAT period

Step 3: Sign up and submit their VAT Return through MTD