All you need to know about preparing for MTD for VAT

It is a new year and hopefully, it will be better than the last one. It is a time for resolutions and for SMEs it is time to focus once again on preparing for the latest Making Tax Digital (MTD) requirements.

VAT registered businesses have just a couple of months to prepare for the big changeover to MTD for VAT as the Government prepares to roll out the next phase of its digital tax plan with the aim of making it the most efficient tax system in the world.

From April 2022 even the smallest VAT registered business will need to comply with the quarterly digital recording and reporting of VAT.

What does it all mean?

At the moment those above the VAT threshold of £85,000 must file VAT returns online using HMRC-recognised MTD software, while for those under the threshold, it is optional.

However, in April the requirement will be extended to all VAT-registered businesses, which could catch out many unprepared smaller businesses, who may not have the knowledge, resources or technology to record and submit VAT information to the tax authority.

The Government has said that around a quarter of VAT registered businesses below the VAT threshold have already voluntarily chosen to join MTD, but many more still need to prepare.

How to prepare for MTD for VAT

• If you are VAT registered and below the £85,000 VAT threshold you must be prepared to report and record VAT information using HMRC compliant software from April 2022
• If you are a VAT registered business, you should seek help to implement the latest cloud accounting solutions. Don’t panic – there is still time to ensure you are compliant when the changes happen.

This means you need to record and report VAT information quarterly using HM Revenue & Customs approved software that can:

• Keep and maintain the records specified in the regulations
• Prepare VAT Returns using the information maintained in those digital records
• Communicate with HMRC digitally through its Application Programming Interface (API) platform.

We have already assisted hundreds of larger VAT registered businesses with these requirements by helping them migrate to the latest cloud accounting software – saving them time, money and giving them the latest financial insights.

We are working with a wide range of VAT registered businesses to help them get the necessary software and solutions in place.

What other benefits will I get from online accounting software?

Our HMRC approved cloud accounting services will not only ensure you are compliant, by helping you record and report VAT information each quarter, but they also provide many other benefits, including:

• Up to the minute financial information
• Access anytime, anywhere in the world
• Work, create, and share in real-time with colleagues or an expert adviser
• Easy-to-use online dashboards keep your records, invoices, bills and reports in one secure location
• Bank-level security and 24/7 customer support

Want to know why hundreds of businesses have migrated to these new systems with our help, please contact our expert team today.