Extension of Making Tax Digital for VAT
Currently VAT registered businesses with a turnover above the VAT registration threshold of £85,000 need to keep their records digitally & provide their VAT return information to HMRC through Making Tax Digital (MTD) compatible software.
However, from the first VAT period starting on or after 1 April 2022, any businesses that are VAT registered (including self-employed and landlords), irrespective of their turnover levels, will have to register for MTD, meaning they must:
- keep their records digitally (for VAT purposes only)
- provide their VAT return information to HMRC through Making Tax Digital compatible software
The extension of MTD for income tax self-assessment (ITSA) is not due to come into effect before April 2024, with a later date for partnerships.
For Government Guidance, please see https://www.gov.uk/government/publications/extension-of-making-tax-digital-for-vat