Get to grips with VAT as tax goes digital

Work to overhaul the UK’s tax reporting system is well underway as the Making Tax Digital (MTD) programme continues.

The programme, launched by HM Revenue & Customs (HMRC), aims to make tax more efficient as the department works to become one of the most digitally advanced tax administrations in the world.

It is hoped that the scheme will help businesses and individuals to keep on top of their tax affairs.

A key part of the programme is the digitalisation of reporting VAT, with more taxes set to join the programme in the coming years.

All VAT-registered businesses now must follow MTD rules by keeping digital records and using software to send their VAT returns.

The change came into effect in 2019 and dramatically changed the way businesses operate as VAT recording needs to take place online using HMRC-approved software packages.

A host of records must be kept digitally including your business name, address, VAT registration number, VAT on supplies made and received and any VAT accounting schemes you use. The list is extensive and can be found in full here.

Businesses also need to keep digital copies of documents that cover transactions made on behalf of the business, such as by volunteers for charity fundraising, a third-party business, or employees for expenses in petty cash.

To get started you need to sign up to MTD for VAT on the website. You will need a business email address, a Government Gateway user ID and password (you can create this when first signing up), your VAT registration number and the latest VAT return.

The world of MTD may seem daunting but we are on hand to help.

To start your MTD journey for VAT, get in touch with our team of experts today.

Posted in Blog.