Businesses have less than a week until Making Tax Digital (MTD) for Value Added Tax (VAT) becomes mandatory for VAT-registered businesses on 1st April.
MTD is designed to help businesses get their tax returns right by reducing errors as well as making it faster to prepare and submit returns.
Nearly 1.6 million taxpayers had joined MTD for VAT as of December 2021 with more than 11 million returns successfully submitted. Around a third of VAT-registered businesses with taxable turnover below £85,000 have voluntarily signed up to MTD for VAT ahead of April 2022.
HMRC recommends VAT-registered businesses that have not yet signed up to MTD for VAT do so now. All VAT-registered businesses must use MTD for VAT for their first VAT return starting on or after 1st April 2022.
Lucy Frazer, financial secretary to the Treasury, said: “Businesses using MTD are saving time on their tax affairs, streamlining their processes and boosting their productivity as a result.
“Our first move towards a modern, digital tax service – MTD makes it easier for businesses to get their tax right first time.”
There is a range of support and information available including online content such as YouTube videos, GOV.UK help pages and HMRC’s Extra Support service. In addition for those needing more help and support on signing up for MTD, HMRC is running a series of webinars.
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 for failure to do so.
There is a range of compatible software products available for MTD for VAT, allowing businesses to choose which tools they use. A list of software compatible with MTD for VAT, including free and low-cost options, can be found on GOV.UK.
To sign up to MTD VAT, businesses or agents, 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