Since April 2019, businesses with a taxable turnover above £85,000 have been required to follow the Making Tax Digital (MTD) filings process, which includes keeping digital records and filing VAT returns using MTD-compatible software.
In July 2020 it was announced that all VAT-registered businesses must file their VAT returns digitally under MTD from April 2022, regardless of turnover. This means that with the approaching new financial year 2023, a business that has been voluntarily registered for VAT will fall within MTD for VAT.
Thus, all VAT registered businesses will now need to keep digital records for VAT quarters starting on or after 1 April 2022 irrespective of their taxable turnover.
If your business has not yet signed up for MTD for VAT you can do so here.
A list of HMRC approved MTD for VAT compatible software, including low-cost options is available on GOV.UK.
For further guidance, including digital record keeping, visit HMRC VAT Notice 700/22: Making Tax Digital for VAT.
Note: some VAT-registered businesses may be eligible for an exemption from Making Tax Digital if it is not reasonable or practicable for them to use digital tools for their tax. If a business has previously been granted an exemption for VAT online filing, this will carry over to Making Tax Digital VAT requirements. Information on how to apply for an exemption is available on GOV.UK.
For more information about MTD, or help with going digital, please get in touch!