Making Tax Digital for VAT – The next steps

24th November 2020

As HMRC’s ambition to become one of the most digitally advanced tax administrations in the world continues so the way the tax system works to become more effective, more efficient and easier for taxpayers to get their tax right the next steps have been issued by HMRC.

 

Currently VAT-registered businesses with a taxable turnover above the VAT threshold of £85,000 currently are required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns.

 

In September 2020 HMRC wrote to all VAT customers who are mandated for MTD for VAT but who have not yet signed up.

 

The letter was a final reminder in a series of letters issued to businesses and stated that if they do not start using MTD before their next VAT filing deadline, HMRC may charge penalties.

 

What’s changing for other VAT businesses?

 

VAT-registered businesses with a taxable turnover below £85,000 will be required to follow Making Tax digital rules for their first return starting on or after April 2022.

 

If you are below the VAT threshold you can voluntarily join the Making Tax Digital service now.

 

Please contact your local office for further information if you require further advice on this matter.

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