The deadline for making the switch to Making Tax Digital for VAT is coming up. All businesses should be ready for the change before April 2022.
In this week’s blog at SCS Financial Management we look at how to comply with the Making Tax Digital regulations. For more details, call us in Reigate on 07484 821 645.
Register for Making Tax Digital
To comply with the new Making Tax Digital (MTD) regulations, the first thing you need to do is set up an account. Once you have registered on the online Government Gateway, you can use this account to pay taxes and check your tax status.
An advantage of registering now is you can get used to the new system and receive regular updates from HMRC before you legally have to. By April 2022, all VAT register businesses must follow MTD rules for their returns.
Use Compliant Accounting Software
Setting up and using bridging software as soon as possible is strongly recommended. Bridging software allows you to continue using Excel or other basic spreadsheet programmes and link that data to HMRC’s platform.
Once the system is in place, you will be able to submit your VAT returns digitally. All your records will be in one place and if you update them throughout the year, staying organised will be easy.
You may wish to invest in accounting software that does the same jobs as the bridging and spreadsheet programmes but as an all-in-one solution in the longer term. If you would rather outsource this to an accountant or bookkeeper, they will have the professional software to keep your finances up to date with HMRC.
For now, MTD only affects VAT, but there are plans to include Corporation and Income Tax in the future. The expected date for this system to include Income Tax is April 2023 and 2026 for Corporation Tax.
These dates are likely to change, so keeping updated is essential. By setting up your Government Gateway account and using MTD as soon as possible, you will become accustomed to using the software and be notified of any upcoming changes.
Get in Touch
For more details about complying with the Making Tax Digital regulations by April 2022, contact SCS Financial Management today. Call us on 07484 821 645 or send us a message via the contact form and a member of our team will be happy to help.