What the HMRC Making Tax Digital for VAT emails and letters mean for your business

Minerva Biven


Have you been given an e mail or letter from HMRC about Building Tax Electronic for VAT?

If you have, you’re not alone.

HMRC is sending a collection of Earning Tax Electronic (MTD) for VAT email messages and letters to suitable VAT-registered organizations.

This is to allow them know that the way VAT data are held and VAT Returns are submitted has improved, and that they have to have to start subsequent MTD for VAT now.

Nonetheless, if your business enterprise hasn’t been given just one nevertheless, which is not to say it will not.

Browse this posting to discover out about the added benefits of Earning Tax Digital, what HMRC’s communications signify for you, and what ways you need to take upcoming.

Here’s what we deal with:

Why Producing Tax Electronic will advantage your company

Earning Tax Digital is a single of the most crucial modifications to United kingdom firms at any time.

Not only does it help to reduce errors when it comes to working with business admin, it enhances productivity for your company way too.

Spending significantly less time on admin so you can focus on your enterprise is critical – by relocating to digital accounting, corporations can save an common of £17,000/27.6 days for every calendar year, in accordance to exploration by Sage.

Why has my organization received an electronic mail or letter from HMRC?

If your enterprise has gained one particular of the MTD for VAT e-mails or letters from HMRC, it’s due to the fact you want to start off keeping digital data and modify the way you post your VAT.

The contents present you with a series of measures that need to be taken so your small business is adhering to the MTD for VAT procedures.

In the phrases of one piece of conversation from HMRC, it states:

“Even if you by now use computer software to retain your documents and file your VAT returns on-line, don’t fail to remember you will have to indicator up for MTD in advance of you file your future return.”

What do the email messages and letters (and Creating Tax Electronic) necessarily mean for me?

It implies that given that 1 April 2022, the way all VAT-registered corporations maintain their data and submit VAT returns improved.

Now, HMRC needs your business enterprise to preserve documents digitally, whilst the submission of VAT data needs to be accomplished by using MTD appropriate software or bridging software package.

What comes about if I’ve not gained everything from HMRC?

HMRC will be sending out extra e-mails and letters to organizations, so there’s a prospect you’ll receive one if your company is VAT registered and you have not by now signed up for MTD for VAT.

On the other hand, you really don’t have to wait to acquire an e-mail or letter from HMRC to begin working with MTD for VAT – you can sign up for it now.

What do the HMRC Producing Tax Digital emails and letters say?

They get started by telling you that you want to just take action to get ready for Making Tax Digital.

They state that all VAT-registered organizations require to indicator up for MTD for VAT, no matter of taxable turnover.

Up coming, they go over a collection of measures for you to consider (the email messages and letters go into additional depth):

  • You have to have MTD suitable computer software or bridging application
  • You must use your software to maintain your electronic records
  • You should go to the Gov.british isles website so you can sign up for MTD for VAT
  • You have to allow your software package to get the job done with MTD, then you can begin publishing your VAT Returns making use of MTD.

They also warn that if you do not get started using MTD before your 1st MTD for VAT return deadline (your certain deadline need to be on your electronic mail or letter), there is a probability you will be penalised.

Additionally, there is a reference to MTD exemptions (obtain out a lot more at Gov.british isles), and a be aware pointing out that if you use an accountant or agent to assistance you regulate your company taxes, they can support your move to MTD for VAT.

Important dates to be informed of

Making Tax Digital is mandated for all VAT-registered organizations as of 1 April 2022, but what other dates will have to you retain in intellect?

Properly, that depends on when your initially total VAT period of time commences on or immediately after this day.

If you are a business enterprise with the typical quarterly VAT accounting periods, you have to preserve electronic data and post your VAT Return by means of MTD from the following start out dates:

  • 1 April 2022: If the previous VAT quarter ended on 31 March 2022.
  • 1 Might 2022: If the previous VAT quarter ended on 30 April 2022.
  • 1 June 2022: If the past VAT quarter ended on 31 Could 2022.

The identical logic applies to month-to-month and yearly VAT accounting periods, so retain in head when your initially complete VAT accounting intervals commences.

And given that there is continue to a require to file VAT Returns by 1 calendar thirty day period and 7 times, at the most up-to-date, this means the initial VAT Returns for MTD for VAT must be submitted by the subsequent:

  • 7 August 2022 for a VAT quarter starting 1 April 2022.
  • 7 September 2022 for a VAT quarter beginning 1 May perhaps 2022.
  • 7 October 2022 for a VAT quarter commencing 1 June 2022.

There are also deadlines to sign-up for MTD for VAT to keep in thoughts.  

If you currently shell out by Immediate Debit, don’t sign up far too shut to the day your VAT Return is owing or you may perhaps shell out two times.

To prevent this, make certain you never indicator up significantly less than:

  • 7 days ahead of your return is because of
  • Five days just after your return is due

And if you really do not spend by Direct Debit, make absolutely sure you indication up at the very least three days prior to the because of day for your VAT Return.

In which you can get help getting ready for MTD

To aid you with your preparations for Earning Tax Electronic, HMRC’s email messages and letters deal with a couple of sources that will supply you with the assistance necessary to make the go to MTD for VAT a easy 1.

They incorporate common information and facts on Generating Tax Electronic and particulars on digital document trying to keep (product sales and purchase documents should be kept digitally, even though invoices nonetheless have to have to be retained for at the very least 6 yrs).

In addition, at Sage, we have developed a Generating Tax Digital Hub, which has solutions to queries you may have about MTD for VAT, and you can indicator up for a webinar to information you alongside the way.

There is also details to support you make certain you have MTD appropriate program, so you can deal with and submit your VAT Returns in the proper way.

And we’ve place together the next MTD for VAT posts, so you can make the move to all factors digital a breeze:

Closing feelings on Producing Tax Electronic

Moving to Producing Tax Electronic for VAT may appear to be like a chore – 1 far more issue to stress about, on prime of all of the other issues you have to encounter with your small business.

However, it will make a true variation to the way you manage your business admin. In addition, owning clarity on your company finances and the tax you owe will indicate you can regulate your dollars extra proficiently.

The exact goes for holding digital information – the days of hunting for paper files or filing them in a cupboard will be around.

Getting quick access to anything via a couple clicks of your laptop or cell cell phone will necessarily mean you help save time – and decrease a lot of tension far too.


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