Making Tax Digital for business update – VAT part 2 of 4
Currently MTD is compulsory for all VAT registered traders who are required, by law to register for VAT as their VATable turnover exceeds, or is expected to exceed £85,000 over the next 12 months.
The governments recent announcement states ALL VAT registered traders (regardless of turnover) will be required to submit their VAT returns using the Making Tax Digital system from 1 April 2022.
As with the current rules for Making Tax Digital, the financial records of a business must be stored in an electronic format. This means business can store their financial information in a dedicated software package, or on spreadsheets provided those spreadsheets are in the format capable of sending information direct to HMRC without further manual adjustment.
There will be no changes relating to deadlines and payment of VAT returns as a result of this policy.
For those businesses already submitting tax returns via an MTD compatible system (be that dedicated software or spreadsheets) no additional action will be necessary.