It’s less than a month left for businesses in the UK to migrate from their existing VAT online accounts in order to fill their VAT. From November 1, 2022, companies will have to begin using software compatible with the Making Tax Digital VAT platform.
The HMRC reminds companies that all businesses subject to filling VAT have to sign up for Making Tax Digital (MTD) and have software that supports the platform. Otherwise, keeping VAT records and filing reports might become impossible, and penalties may occur. The only scenario when companies can avoid using MTD is in cases when HMRC claimed the businesses exempt from MTD. Typically, such exemptions are granted for companies for which using computers or the Internet is not reasonable or practical.
Making Tax Digital is part of a strategy to help companies go digital and, this way, simplify their taxation processes and reduce errors.
According to the HMRC’s data, over 1.8 million companies are already using Making Tax Digital. HMRC has received more than 19 million returns via the MTD.
Companies already using digital VAT reporting tools are recommended to check if their software is compatible with the MTD. It is best to do that by registering at MTD before the deadline on November 1.
The HMRC reminds company representatives that a full list of compatible software is uploaded on GOV.UK, and includes both free and affordable options. Once the software is installed, permissions for MTD to use data should be given, and VAT returns can be filed.
From November 1, businesses new to VAT will be automatically registered for MTD during their VAT registration.
According to both HMRC‘s data and independent research, MTD speeds up the VAT reporting process, reduces the number of mistakes, and generally supports business growth.
If you need any help with your MTD onboarding, please get in touch with our experts at 1stopVAT, and we will make your digital transition effortless.