Making Tax Digital – April 2022
You may already be aware but we would like to take this opportunity to remind and assist you to prepare for the latest stage in HM Revenue & Customs initiative, “Making Tax Digital”.
What is it?
Making Tax Digital (MTD) is an initiative from HM Revenue & Customs to streamline the UK Tax System. The latest step is the expansion of MTD for all VAT registered businesses.
How does it affect your business?
From April 2022 VAT Returns need to be submitted directly to HM Revenue & Customs using software. You will need to ensure that your accounting records comply with the MTD requirements and that you have accounting software which will enable you to submit your VAT Returns with periods commencing after 1 April 2022. This responsibility has been imposed upon you, the tax payer, by HM Revenue & Customs and will be enforced by them by a system of fines and penalties for non compliance.
What does your business have to do?
The answer to this depends on what stage your business is at with regard to computerising their accountancy system. If you already have a computerised accountancy system, you should check with your software provider that it is “Making Tax Digital” compliant and that you are operating the latest version of your accountancy software. In general terms this will require you to upgrade to the current version of your accountancy software.
If on the other hand you are still using a manual accounting system, or spreadsheet system, you will need to transfer to software that is Making Tax Digital compliant.
We recognise that every businesses’ circumstances are unique and that one fix will not fit all. If you wish to discuss this issue further and how it affects you and your business please do not hesitate to contact the office.