There’s only a few months until the final stage of Making Tax Digital (MTD), meaning all VAT registered businesses, no matter how small, must comply with the quarterly digital recording and reporting of VAT from 1st April 2022.
This includes businesses who are voluntarily registered and below the £85,000 VAT threshold.
Smaller businesses must act now to ensure their systems and process are in line with the new tax regime’s requirements by using the latest MTD compliant cloud accounting software, to avoid being caught out by this change.
This may involve investing in:
- Advice and help from their accountant
- HMRC compliant software
- Proficient training on new software
Popular cloud accounting platforms have already been created or modified to make sure that they meet the standards of MTD for VAT.
The requirements MTD software will need to meet are:
- Creates a VAT or tax return from the digital records held in functional compatible software and provides HMRC this information digitally
- Keeps records in a digital form
- Preserves digital records In a digital form
- Provides HMRC with VAT and tax data voluntarily
- Receives info from HMRC via the API platform that the business has complied.
Failure to comply could result in fines or investigations initiated by HMRC, so it is imperative that you make sure your business is ready for these changes.
If you need help or advice on MTD, please contact us at enquiries@aitaccountants.co.uk
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