Making Tax Digital for VAT extended from April 2022 to all VAT registered businesses

Making Tax digital for VAT is being extended from April 2022 to include all VAT registered businesses, with the requirement to file VAT returns through MTD, regardless of their turnover.

HMRC has recently issued a reminder, urging all VAT-registered businesses to sign up for MTD for VAT before 1 April 2022 and make the necessary preparations before it becomes mandatory from this date.

HRMC estimate that as of December 2021, almost 1.6 million taxpayers had signed up to MTD for VAT and over 11 million VAT returns have successfully been submitted. In addition to this, HMRC reports that around a third of VAT-registered businesses, whose taxable turnover is below £85,000 have voluntarily signed up to Making Tax Digital VAT ahead of the 1 April 2022 deadline.

Who is already required to follow Making tax digital for VAT?

Businesses with a taxable turnover above £85,000 have since April 2019 been required to follow MTD, which involved keeping digital records and filing VAT returns using MTD compatible software.

Making tax digital for all VAT registered businesses announcement

This announcement was first made in July 2020 that regardless of turnover, all VAT-registered businesses must file digitally through MTD from 1 April 2022.

How do you sign up to MTD for VAT?

To sign up to MTD VAT, a business, or their agent will need to follow the following steps:

  • Visit the MTD VAT page on GOV.UK and choose MTD-compatible software (link here)
  • Digital records are required to be kept from 1 April 2022 or the beginning of the businesses VAT period
  • To sign up and submit their VAT Return through MTD

If businesses have not yet signed up to Making Tax Digital for VAT, we recommend they do so now to allow time to prepare ahead of the April 2022 deadline.

Further information

Further Information on this MTD for VAT announcement can be found on gov.uk here for more information on Alexander & Co’s VAT services, and how we can assist you businesses, please click here

 

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