It would be unlikely, if you’re VAT registered, that you would have missed the countless articles, posters and TV adverts to let you know that Making Tax Digital for VAT has commenced as of April 1, 2019.
As it stands, only four per cent of UK businesses have signed up for Making Tax Digital. This leaves over one million to do so before the deadline. This information was gathered from Fintech firm Float who made a Freedom of Information request to HMRC. They also discovered that if the rate of registration continues at 3,000 businesses per day, only 402,000 will have signed up by August, which is when most of the quarterly VAT returns will be due for submission.
What is Making Tax Digital for VAT?
This is a government initiative to streamline the tax system and reduce the number of reporting errors that result in people paying too much or too little tax. Under this new system, you will be required to submit your VAT returns through HMRC-approved software.
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How to get started for Making Tax Digital for VAT
If you’re yet to embrace this new digital revolution, watch the video below to learn more about MTD and what you need to do:
What if you’re not ready?
Making Tax Digital for VAT has now come into force, but you won’t need to file a quarterly return until 1 July. HMRC state that they will “allow a period of time, the “soft landing period”, for businesses to have in place digital links between all parts of their functional compatible software.”
This means that if Making Tax Digital rules first apply to you from a:
- VAT period starting on or after 1 April 2019 – you will have until your first VAT return period starting on or after 1 April 2020 to put digital links in place.
- VAT period starting on or after 1 October 2019 – you will have until your first VAT return period starting on or after 1 October 2020 to put digital links in place.
Visit our YouTube channel to learn more about Making Tax Digital for VAT.