MTD for VAT currently applies to VAT registered businesses with taxable turnover in excess of £85,000, the current VAT registration threshold.
From April 1, 2022, MTD for VAT is being extended to all VAT registered businesses.
HMRC have updated their guidance in VAT Notice 700/22 regarding MTD for VAT.
- explains the digital records businesses must keep, and ways to record transactions digitally in certain special circumstances
- explains what counts as compatible software, and when software programs do and do not need to be digitally linked where a combination of programs is used
- gives examples of when digital links are required
Section 4 alerts businesses to the end of the ‘soft landing’ period.
HMRC gave a period of time (known as the soft landing period) during the first two years of Making Tax Digital, to help businesses put digital links in place between all parts of their functional compatible software.
Businesses were not required to have digital links in place until their first VAT Return period, starting on or after April 1, 2021.
During the soft landing period, if a digital link was not established, HMRC accepted the use of ‘cut and paste’ or ‘copy and paste’ as being digital links.
The soft landing period has now ended.
Read the VAT Notice 700/22 regarding MTD for VAT here.
This publication is essential reading for all VAT registered business as some of the content has the force of law.
If you have any questions about MTD please contact our software specialist Anna Rowson-Smith on 01244 343504 or email email@example.com
Ellis & Co Chartered Accountants and Business Advisers, Chester & Wrexham - 01244 343504, firstname.lastname@example.org