All VAT registered businesses must use Making Tax Digital (MTD) compatible software to keep their VAT records and file their VAT returns, as of 15 May 2023.
This is a legal requirement and failure to do so will land you with a penalty.
If you’re yet to install MTD software for your VAT returns, below is a step-by-step guide detailing what to do next.
Setting up Making Tax Digital
Step 1)
Choose MTD-compatible software that’s right for your business. If you’re unsure about this, please get in touch with PKB and we can help.
Step 2)
Check the software permissions to allow it to work with MTD. Go to GOV.UK and search ‘manage permissions for tax software’ for information on how to do this.
Step 3)
Keep digital records for current and future VAT returns. More information about what records must be kept digitally is on the GOV.UK website.
Step 4)
File your future VAT returns on time using MTD-compatible software. You can find out how to submit your VAT returns on GOV.UK.
You may receive a penalty if you don’t file on time via compatible software. For VAT accounting periods starting on or after 1 January 2023, HMRC introduced new penalties for VAT returns which are submitted late and VAT which is paid late. The way interest is charged has also changed.
You can find more information about new VAT penalties on GOV.UK or by watching a recorded webinar for VAT registered businesses.
If you have any questions about Making Tax Digital and how it affects your business, please get in touch with PKB.
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