Have you ever obtained a letter from HMRC about Making Tax Digital for VAT? When you’ve got, you’re not alone.

HMRC is sending a sequence of Making Tax Digital (MTD) for VAT letters to eligible VAT-registered companies.

That is to allow them to know that the best way VAT data are saved and VAT Returns are submitted has modified, and that they should begin following MTD for VAT.

Nonetheless, if what you are promoting hasn’t obtained a letter but, that’s to not say it gained’t.

Learn this text to seek out out about the advantages of Making Tax Digital, what HMRC’s letters imply for you, and what steps it is best to take subsequent.

Right here’s what we cowl:

Why Making Tax Digital will profit what you are promoting

Making Tax Digital is without doubt one of the most vital modifications to UK companies ever.

Not solely does it assist to cut back errors relating to coping with enterprise admin, it enhances productiveness on your firm too.

Spending much less time on admin so you may deal with what you are promoting is vital – by transferring to digital accounting, companies can save a mean of £17,000/27.6 days per 12 months, in line with analysis by Sage.

Why has my enterprise obtained a letter from HMRC?

If what you are promoting has obtained one of many MTD for VAT letters from HMRC, it’s as a result of you must begin maintaining digital data and alter the best way you submit your VAT.

The contents of the letters offer you a sequence of steps that should be taken so what you are promoting is following the MTD for VAT guidelines.

Within the phrases of one of many letters from HMRC: “All VAT-registered companies, no matter taxable turnover, might want to begin utilizing MTD for VAT return intervals beginning on or after 1 April 2022.”

What do the letters (and Making Tax Digital) imply for me?

It implies that since 1 April 2022, the best way all VAT-registered companies hold their data and submit VAT returns modified.

Now, HMRC requires what you are promoting to maintain data digitally, whereas the submission of VAT information must be performed through MTD compatible software or bridging software.

What occurs if I’ve not obtained a letter from HMRC?

HMRC will probably be sending out extra letters to companies, so there’s an opportunity you’ll obtain one if what you are promoting is VAT registered and also you’ve not already signed up for MTD for VAT.

Nonetheless, you don’t have to attend to obtain a letter from HMRC to start out utilizing MTD for VAT – you may join it now.

What do the HMRC Making Tax Digital letters say?

The letters start by telling you that you must take motion to prepare for Making Tax Digital.

They state that each one VAT-registered companies want to enroll in MTD for VAT, no matter taxable turnover.

Subsequent, they cowl a sequence of steps so that you can take (the letters go into extra element):

  • You want MTD appropriate software program or bridging software program
  • It’s essential to use your software program to maintain your digital data
  • It’s best to go to the Gov.uk web site so you may join MTD for VAT
  • It’s a must to permit your software program to work with MTD, then you can begin submitting your VAT Returns utilizing MTD.

The letters additionally warn that if you happen to don’t begin utilizing MTD earlier than your first MTD for VAT return deadline (your particular deadline needs to be in your letter), there’s a chance you’ll be penalised.

Moreover, there’s a reference to MTD exemptions (find out more at Gov.uk), and a be aware declaring that if you happen to use an accountant or agent that can assist you handle what you are promoting taxes, they’ll help your transfer to MTD for VAT.

The place you will get assist getting ready for MTD

That will help you along with your preparations for Making Tax Digital, the letters cowl a couple of sources that may offer you the help required to make the transfer to MTD for VAT a easy one.

They embrace common data on Making Tax Digital and particulars on digital record keeping (gross sales and buy data have to be saved digitally, whereas invoices nonetheless should be retained for no less than six years).

As well as, at Sage, we’ve created MTD Hub, which has solutions to questions you might have about MTD for VAT, and you may join a webinar to information you alongside the best way.

There’s additionally data that can assist you be sure to have MTD compatible software, so you may handle and submit your VAT Returns within the appropriate method.

And we’ve put collectively the next MTD for VAT articles, so you can also make the transfer to all issues digital a breeze:

Ultimate ideas on Making Tax Digital

Shifting to Making Tax Digital for VAT may seem to be a chore – yet one more factor to fret about, on high of all the different challenges you must face with what you are promoting.

Nonetheless, it is going to make an actual distinction to the best way you handle what you are promoting admin. As well as, having readability on what you are promoting funds and the tax you owe will imply you may handle your cash extra successfully.

The identical goes for maintaining digital data – the times of trying to find paper paperwork or submitting them in a cupboard will probably be over.

Having easy accessibility to every thing through a couple of clicks of your laptop or cell phone will imply you save time – and cut back lots of stress too.