Making Tax Digital (MTD) for VAT – 3 Points to Note
Digital links – soft landing to end
As things stand the soft landing period HMRC allowed regarding digital link requirements will end soon.
Most businesses will be required to have digital links between software programs for their first VAT return period starting on or after 1 April 2021. A digital link is an electronic or digital transfer, or exchange of data, between software programs, products or applications.
You might want to review your systems to ensure you comply. There may, in certain circumstances, such as complex IT systems or having just acquired another business, be an option to make a formal application to HMRC for an extension to the soft landing period. Unfortunately cost alone is not seen by HMRC as a sufficient reason.
Extension of MTD to all UK VAT registered businesses
MTD is due to be extended to all UK VAT registered businesses from 1 April 2022.
MTD already applies to those businesses with a UK taxable turnover above the VAT registration threshold of £85,000.
Again you might want to review your systems, and consider an early application for MTD to ensure you have everything in order in plenty of time.
https://jsca.co.uk/extension-of-making-tax-digital-mtd-to-all-uk-vat-registered-businesses/
HMRC systems work
HMRC are making IT changes from around April 2021 – September 2021.
This is likely to affect businesses who are not already signed up for MTD for VAT and a small number of those who already have. HMRC will write to you if it affects you.
If you pay your VAT by direct debit and would like to continue to do so after the systems work, HMRC are requesting that you supply them with your e-mail address via your Business Tax Account. Please note this is for notification purposes and they will not be asking you to pay them anything by e-mail.
The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.
Photo by Lukas Blazek on Unsplash
