Making Tax Digital for Value Added Tax (VAT) becomes mandatory for all VAT registered businesses from 1 April 2022.
Making Tax Digital is a government scheme which has been designed to transform tax administration, making it easier for businesses and individuals to get their tax right.
As it becomes increasingly common for accounts and records to be stored digitally by businesses, Making Tax Digital sets out to digitalise UK Tax by allowing firms to keep and maintain records and communicate with HMRC through its API platform.
Similarly, Making Tax Digital for VAT requires VAT registered businesses to keep records digitally and file their VAT returns through the compatible software.
Businesses with a taxable turnover above £85,000 have been required to follow the scheme since April 2019 and nearly 1.6 million taxpayers joined Making Tax Digital for VAT as of December 2021.
Around a third of VAT registered small businesses with revenues below £85,000 have voluntarily signed up ahead of the impending April deadline and those within the same revenue bracket who haven’t yet joined the scheme are encouraged to do so.
Non-compliance will be costly as HMRC will impose penalties on businesses and individuals, rather than their tax agents.
How can the Chamber help?
To ensure your business is prepared and can start the new financial year with confidence, the Chamber is facilitating a practical and interactive online workshop led by its Corporate Partner Centurion VAT Specialists.
Whether your business has already started Making Tax Digital for VAT or is approaching the scheme for the first time, the session on 16 February will help clarify the VAT reporting requirements that you will need to adhere to.
Taking you through the benefits and challenges of the Making Tax Digital for VAT system, the session will cover details of the scheme, compliance, deadlines, penalties and how it impacts internationally trading businesses.