HMRC now requires that you make tax digital (MTD). We have compiled a list to help you understand the new digital way of submitting VAT returns. Here’s a quick overview of MTD.
Making Tax Digital: History
All VAT-registered companies with a taxable turnover exceeding the PS85,000 threshold are required to submit VAT returns via an approved app.
MTD for VAT basically means that businesses will need to use accounting software that connects to HMRC to file a VAT return. For more information on this new tax system, download our free guide.
How to Return Digital VAT?
Your business must be registered with HMRC before the deadline for digital VAT returns. Your business cannot be automatically enrolled, even though MTD is mandatory for VAT.
Logging in to your Government Gateway account is required for registration. After signing up, you can find the steps below.
You can always keep up-to-date with the most recent MTD and VAT information by visiting the official government website. To know more about the same, you can always consider connecting with the accounting services London experts and get all the assistance related to it. Below we are going to discuss every aspect related it. Check it out.
Sign Up For VAT With MTD: What Do Businesses Need To Do?
This article will show you how to register for MTD VAT as a sole trader, individual or incorporated company.
Step 1: Review your software. Check that your software is compatible with MTD and integrates with HMRC. You should switch to a solution that allows you to submit VAT returns in this manner if your current software is not compatible.
Step 2: Turn on the MTD feature for VAT in your software. After you have installed compatible software, verify that the MTD feature for VAT is enabled. It is most likely an ‘EnableMTD’, “Authenticate” or other similar option located in the settings, options, or feature menu area. If you are unsure of how to do it, speak to your software vendor.
Step 3: Keep digital records. Step 3: Keep digital records if you aren’t already. This is a requirement for MTD VAT.
Step 4: Continue to use your software throughout the year. You can continue to use your software throughout the year.
Can I continue to use Spreadsheets for my VAT Accounts?
Under Making Tax Digital, the government said that spreadsheets could temporarily be used for digital record-keeping.
However, digitally integrated spreadsheets are now allowed starting 31 March 2020.
Submissions For VAT: Deadline
The MTD cutoff will not affect the deadlines for filing VAT returns and the schedule businesses must file them. This applies to all VAT return schemes, including monthly, quarterly, and annual.
You can still make any necessary adjustments to VAT returns by sending an email to HMRC or by filing a quarter’s VAT return. Learn more about how to submit a VAT return.
Penalties for Soft Landing Period
Between 1 April 2019 – 1 April 2020, a “soft landing” period will be in place. HMRC also indicated that it would be more lenient with penalties if businesses make significant efforts to comply MTD for VAT.
What Are The MTD Software Solutions?
MTD has transformed businesses of all sizes and sectors, allowing them to keep more accurate records and save time. You must choose the right software to meet your needs.
HMRC offers a list compatible software that you can use for your VAT Return so it is important that you assess all the options to find the ideal fit.
What Features Should I Look For In An Accounting App?
There are many small business expense trackers on the market and every single one will claim to be the best. How can you choose the right one for your business?
- The basics
- There is no jargon and the information is clear and simple to understand.
- To save time, you can set up recurring transactions.
- You can keep track of multiple businesses using one system.
Is the app well-respected online? Is there a team of experts available to assist you with any issues? Online reviews will show you what other businesses think about the support and functionality of their business.
This blog will provide more information about how to choose a small business expense tracking application. You can test one that is specifically designed for small businesses or self-employed people.
Many apps offer features that make it easier to transition to digital taxes. Here’s a comparison of how we stack up against other apps.
With a user-friendly app in your pocket, it’s easy to make the transition.
Signing up for Making Tax Digital to VAT starting in April 2022 will be a lot easier than signing up back April 2019. It is easier because accountants and tax advisors may have two years of experience to help guide them.
HMRC has since gotten past any problems they might have had in the early days. They have not yet experienced the soft-landing period which eased the rules for digital linking. With the help of HMRC and other accounting software providers, any challenge can be overcome.
For accountants, automation is a way to save time and money when dealing with Making Tax Digital. Learn how our ROI calculator can help you. To know more about the same, you can always connect with the best VAT Return Services London experts and get all the support. If you are looking for one, then you can connect with MintAccountax and get all the assistance you need related to it.