Small businesses urged to choose accounting software as the MTD deadline loomsStuart Taverner
Businesses have just a few days to prepare for mandatory Making Tax Digital (MTD) for Value Added Tax (VAT), including choosing an MTD-enabled accounting software.
Businesses with taxable turnover below £85,000 are the last group of VAT-registered businesses to join MTD and have until April 1 to register.
One of the requirements of MTD is that all businesses need compatible accounting software. So, now is the perfect time to learn more about Cashflow Manager, the simplest MTD-enabled bookkeeping solution that’s perfect for small businesses.
HM Treasury’s Financial Secretary to the Treasury, Lucy Frazer, said that businesses that are already using MTD are saving time on their tax affairs, streamlining their processes, and boosting their productivity.
“Our first move towards a modern, digital tax service – MTD makes it easier for businesses to get their tax right [the] first time,” she said.
Nearly 1.6 million taxpayers joined MTD for VAT as of December 2021 with more than 11 million returns successfully submitted. Around a third of VAT-registered businesses with a taxable turnover below £85,000 have voluntarily signed up to MTD for VAT ahead of April 2022, and thousands more are signing up each week.
The HMRC is urging VAT-registered businesses that have not yet signed up to MTD for VAT to do so now, warning that those who do not join may be charged a penalty for failure to do so.
Agents can sign up on behalf of a business, although businesses remain responsible for meeting their VAT obligations. Those who do not join may be charged a penalty for failure to do so.
To sign up to MTD for VAT, businesses, or an agent on a businesses’ behalf:
Step 1: Visit GOV.UK and choose an MTD-compatible software (users can search for Cashflow Manager for more details)
Step 2: Keep digital records starting from 1 April 2022 or the beginning of their VAT period
Step 3: Sign up and submit their VAT Return through MTD
For those who need more help and support on signing up for MTD, HMRC is running a series of webinars.
Example MTD case studies of businesses who are currently benefiting from MTD for VAT can be found on YouTube.