Regardless of their turnover, all VAT registered businesses must submit their VAT returns digitally from 1s April 2022.
According to the previous guidelines, many businesses were under the impression that only those businesses whose taxable turnover met or exceeded the VAT registration threshold were required to submit their returns through a Making Tax Digital compliant software or interface. But according to the new guidelines, no matter what the size of your business is, you must submit your VAT returns digitally using an MTD compliant or MTD approved interface.
What does that mean?
Up till now you may have been filing your VAT returns through the HMRC website but from first April onwards this option is not available to VAT registered businesses.
To be able to file your back returns by now you must be using an MTD-compliant software like QuickBooks, FreshBooks, or Xero. You need to use an MTD- compliant software to
- Maintain your financial records digitally
- Send your VAT returns to HMRC
What do you need to do to file your VAT returns through Making Tax Digital?
Your business already VAT registered? Then, no matter what the size of your business is, you need to first maintain your financial records using an MTD-compliant accounting and financial planning software. You can use one of the software listed above.
This may take some time so it is advised that you collaborate with an accounting firm like ours to migrate all your existing data to the MTD-compliant software.
Once all your financial records are in the software, you need to sign up for Making Tax Digital on the HMRC website. You should get a confirmation email within 72 hours. Once you receive the email, you are ready to submit your VAT returns.
Haven’t yet initiated the process of digitally maintaining your financial records? Since submitting VAT returns digitally has begun from April 1 onwards, and if you haven’t yet started maintaining your records digitally, you can contact us for our assistance. We can help you with digitising all your off-line records. Even if you have been maintaining your accounts and financial details in an accounting software that is not compatible with MTD, there is no need to worry. Our experts can help you with migrating your data to a compatible software and afterwards filing your VAT returns to the HMRC website through the compatible and recommended software.