MTD for VAT currently applies to VAT registered businesses with taxable turnover in excess of £85,000, the current VAT registration threshold. From 1 April 2022, MTD for VAT is being extended to all VAT registered businesses.
HM Revenue & Customs have updated their guidance in VAT Notice 700/22 regarding MTD for VAT:
This publication is essential reading for all VAT registered business as some of the content has the force of law.
- explains the digital records businesses must keep, and ways to record transactions digitally in certain special circumstances
- explains what counts as compatible software, and when software programs do and do not need to be digitally linked where a combination of programs is used
- gives examples of when digital links are required
Section 4 alerts businesses to the end of the “soft landing” period:
HMRC gave a period of time (known as the soft landing period) during the first 2 years of Making Tax Digital, to help businesses put digital links in place between all parts of their functional compatible software. Businesses were not required to have digital links in place until their first VAT Return period, starting on or after 1 April 2021.
During the soft landing period, if a digital link was not established, HMRC accepted the use of ‘cut and paste’ or ‘copy and paste’ as being digital links.
The soft landing period has now ended.
Growing businesses often don’t have the time or resource to set up a full accounting function within the business. That’s why, at BM Connect, a Beavis Morgan group business, we offer integrated, flexible and affordable outsourced bookkeeping, accounting and payroll solutions.
Our advanced tech-enabled outsourced services, giving you real-time visibility into your business and delivering value cost-effectively and efficiently.
We will also help you navigate any potential pitfalls and ensure all your accounting, financial and bookkeeping needs are managed from one place, so you don’t have to worry about acting as the go-between for your accountant and bookkeeper.
- You will never need to worry about missing a VAT deadline, or the complexities of running payroll.
- You will have access to accurate, reliable and timely financial information when you need it, whether that be profit or cash focused, or both, to accurately and effectively manage the company’s finances and drive growth.
- Our business experts will work with you to identify your requirements and then design and implement a system that will provide all the information you need, within a cost effective and efficient framework.
In turn, if you have any concerns regarding your tax return or other related matters, our experts at Beavis Morgan are available to assist. We take the hassle of dealing with HMRC away from you, so you don’t need to deal directly with them.