MAKING TAX DIGITAL

(MTD) FOR VAT

Making Tax Digital (MTD) is a fundamental change to the UK tax system, it will affect how UK businesses maintain their accounting records.

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Making Tax Digital (MTD) came into effect on 1 April 2019 and affects all VAT Registered businesses in the UK they maintain their accounting records. 

From 1 April 2019 all businesses with  a turnover above the VAT registration threshold will be required to:

 

  1. Maintain their accounting records DIGITALLY in an accounting software package.

  2. Submit their VAT Returns to HMRC online using compatible software

 

Businesses which do not maintain digital accounting records or submit their VAT Return to HMRC digitally will face financial penalties.

Software such as Xero, Quickbooks and Sage Business Cloud Accounts are MTD ready and use of these software packages will ensure that a business is MTD compliant.