BSU GUIDANCE – MTD for VAT from 1 April 2022
Making Tax Digital (MTD) was first introduced for VAT registered businesses whose turnover was above the VAT registration threshold of £85,000 back in 2019.
Phase 2 of the MTD rollout takes effect from 1 April 2022 and will now cover all businesses registered for VAT, regardless of their taxable turnover.
HMRC estimates this will affect over 1 million businesses, and the main points of the new rules are:
From the first VAT period starting on or after 1 April 2022, all VAT registered businesses will have to:
- Keep their records digitally (for VAT purposes only)
- Provide their VAT return information to HMRC through Making Tax Digital compliant software
For those who have already adopted the MTD rules and are using software to maintain their financial records and submit VAT returns to HMRC digitally nothing new is required, but for those who are yet to take that step there is only a couple of months left before these rules come into force, so now is the time to act to avoid falling foul of any HMRC late filing penalties.
Some of the benefits from MTD and digital record-keeping include:
- Increased accuracy of data and reduced scope for human error
- Time savings from a reduction in manual data entry and administrative tasks through automation
- Real-time information enabling businesses to plan for the future rather than looking back at reports from a previous financial period
- Increased collaboration between business owners and their advisors
Charterhouse acknowledge that for some this will be a daunting step and we are here to assist and make the transition as seamless as possible. Our Business Support Unit can assist you at every step of this journey, including:
- Migration of existing data onto software such as Xero,
- Providing you with training and support if you wish to take on the record-keeping task internally
- Offering bookkeeping services including VAT return preparation and submission
- Ongoing advisory support to help your business grow
For more information on MTD and how it will impact you please contact Rob Ward in the Business Support Unit (BSU)