Making Tax Digital for VAT: a Guide to Compliance.

Welcome to your journey with Making Tax Digital (MTD), a game-changer for UK businesses navigating tax compliance! Whether you’re a small business owner, self-employed, or a landlord, MTD is here to simplify how you manage taxes. This guide breaks down everything you need to know to get started with Making Tax Digital, from what it is to its timeline. Let’s dive in and make tax digitalisation feel less daunting!

Deadlines for MTD and VAT

Keeping up with MTD for VAT deadlines is crucial to stay compliant and avoid penalties. Here’s what you need to know:

  • April 2019: MTD for VAT kicked off for businesses with a taxable turnover above £85,000. If you’re in this group, you’re already submitting VAT returns digitally using MTD-compliant software.

  • Ongoing: You must file quarterly VAT returns through MTD-compatible software—no more manual submissions allowed.

  • Future Possibilities: HMRC is considering extending MTD for VAT to businesses below the £85,000 threshold. We’ll keep you updated as things evolve!

Missed a deadline or worried about penalties? Our [Challenges and Considerations] guide dives into how to avoid fines. Want to explore other tax types? Check out [MTD for Income Tax (ITSA)] or [MTD for Corporation Tax].

For the latest on VAT deadlines, see HMRC’s MTD for VAT overview.

Registration for MTD and VAT

If you’ve read our [Getting Started with Making Tax Digital] guide, you know registration is a key step. Here’s how to register for MTD for VAT:

  • Eligibility Check: If your business’s taxable turnover is over £85,000, MTD for VAT is mandatory. Below this threshold? You can join voluntarily to streamline your VAT compliance.

  • Sign Up with HMRC: Use your Government Gateway account to enroll. Not set up yet? Our [Registration and Setup] guide has you covered.

  • Timing Matters: Register at least 7 days before your next VAT return is due to avoid disruptions.

  • Using an Agent: Many businesses rely on accountants for MTD registration. Find tips for choosing an agent in [Specific Audiences].

Need more help? HMRC’s guide to signing up for MTD for VAT walks you through the process.

Government Gateway (Login) for MTD for VAT

As mentioned in Getting Started with Making Tax Digital, the Government Gateway is your online portal for MTD compliance. Here’s how it works for MTD for VAT:

  • Accessing Services: Log in to your Government Gateway account to manage VAT returns and connect with MTD-compliant software.

  • Setup Steps: If you don’t have a Gateway account, create one using your business details. See [Registration and Setup] for a step-by-step guide.

  • Software Integration: Link your MTD-compliant software to the Gateway for seamless VAT return submissions.

  • Stay Secure: Protect your login details to keep your business data safe.

Curious about software options? Our [Compliant Software] guide highlights tools like Sage and Xero that work with the Gateway.

For setup help, check HMRC’s Government Gateway help.

MTD-Compliant Software for VAT

Using MTD-compliant software is at the heart of MTD for VAT, as we touched on in Getting Started with Making Tax Digital. Here’s what you need to know:

  • Software Requirements: Your software must be HMRC-approved, capable of keeping digital records, calculating VAT, and submitting returns directly to HMRC.

  • Top Choices: Popular options like Sage, Xero, and QuickBooks are designed for MTD compliance. Explore these and more in [Compliant Software], including solutions for specific groups like landlords.

  • Bridging Solutions: If your current system isn’t MTD-ready, bridging software can connect it to HMRC’s systems.

  • Tailored Fit: Choose software that matches your business needs. Small businesses and self-employed? See recommendations in [Specific Audiences].

Find the right tool with HMRC’s list of MTD-compatible software.

Exemptions from MTD for VAT

Not every business has to follow MTD for VAT. Here are the exemptions you should know about:

  • Turnover Threshold: Businesses with taxable turnover below £85,000 are exempt but can opt in for digital benefits.

  • Special Cases: Exemptions apply for businesses with complex needs (e.g., insolvency) or those unable to use digital tools due to disability, religion, or remote location. Learn about unique cases in [Specific Scenarios].

  • Applying for Exemption: If eligible, you must request an exemption from HMRC. Note that alternative reporting rules may apply.

  • Staying Compliant: Even exempt businesses should stay informed to avoid penalties. Our [Challenges and Considerations] guide covers penalty risks.

For full details, see HMRC’s MTD exemption guidance.

Remember we are here to enhance your work life balance. We have two ways to get you ready for ‘Making Tax Digital’.

Keep Your VAT Compliance on Track

Building on the foundations from Getting Started with Making Tax Digital, MTD for VAT is all about staying organised with deadlines, registering correctly, using the Government Gateway, choosing MTD-compliant software, and knowing your exemptions. Whether you’re a small business, self-employed, or an accountant, PJL Accounts is here to support your VAT compliance journey. Dive deeper with [Registration and Setup] for setup tips, [Compliant Software] for tool options, or [Specific Scenarios] for cases like non-VAT businesses.

Ready to master MTD for VAT? Contact PJL Accounts or explore our Making Tax Digital guides for more insights!