How does Making Tax Digital for VAT Groups work?
Making Tax Digital is part of the government’s plans to make tax returns easier for individuals and businesses.
With Making Tax Digital (MTD), HMRC aims to become one of the most digitally advanced tax administrators in the world.
Since April 2019, VAT-registered businesses above the threshold of £85,000 have been required to submit their VAT returns via a “functional compatible software” and store VAT accounting records digitally.
From 1st April 2022, use of MTD for VAT accounting will be mandatory for all VAT-registered businesses, including those that sit below the VAT threshold.
As a result, it will no longer be possible for businesses to submit their VAT returns manually via the HMRC website; all businesses must submit VAT returns for their first full period from 1st April via a “functional compatible software”.
If your business sits within a VAT Group, you’ll also need to be aware of the deadlines and anything that needs to be done for MTD that is specific to your situation.