Making Tax Digital for VAT

Rob Geary
Rob Geary, VAT consultant for Lovewell Blake

When Making Tax Digital for VAT (MTD) was introduced back in 2019, it was compulsory for most businesses trading above the VAT threshold of £85,000 to keep records in a digital format and submit their VAT returns using MTD compatible software.

Rob Geary, VAT consultant for Lovewell Blake

There were some exemptions and some deferments.  The main exemption at that time was for VAT registered businesses trading below the VAT threshold, however that exemption is now coming to an end.

With effect from April 2022, all VAT registered businesses must submit their returns using MTD compatible software.

This means all VAT returns starting on or after 01 April 2022 must be kept in a digital format and VAT returns must be submitted to HMRC using MTD compatible software.

The vast majority of businesses will no doubt already be keeping digital records and filing VAT returns in line with the MTD requirements.  However, those who continue to file VAT returns using the ‘old’ method of logging in to HMRC and manually typing the figures into the VAT return boxes need to be mindful of the upcoming changes. 

In limited other circumstances, taxpayers may be exempted from the MTD for VAT requirements. To be exempt, a person must satisfy HMRC of one of the following:

  • it is not reasonably practicable to use digital tools to keep the business records or submit VAT returns because of age, disability, remoteness of location or for any other reason
  • the person/business is subject to an insolvency procedure
  • the business is run entirely by practising members of a religious society or order whose beliefs are incompatible with using electronic communications or keeping electronic records

Should you wish to apply for the exemption please fill out the enquiry form below. 

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