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Making Tax Digital is an initiative the government have introduced to improve the way UK business tax is managed. It involves moving all pen-and-paper tax returns online.
Since April 2019, VAT-registered businesses with a taxable turnover above the VAT threshold (currently £85,000) have needed to keep VAT records digitally and send returns using Making Tax Digital (MTD) compatible software.
From 6th April 2022, all VAT-registered businesses (including those with a taxable turnover below the VAT threshold) will need to store their VAT records digitally and send returns using Making Tax Digital (MTD) compatible software.
For starters, you’ll need compatible accounting software to submit your VAT records to HMRC online. Popular options include Xero, Quickbooks and Sage. Alternatively, you can also submit your digital tax records as basic spreadsheets, as long as you use a bridging software like Zapier.
After you’ve chosen your software, head to gov.uk and sign up for ‘Making Tax Digital for VAT’. When you sign up, you’ll need your:
So gather this info first.
And if you don’t have a Government Gateway user ID / password yet, that’s fine, you can create them via this link too and bring your tax online at the same time.
Join HMRC’s live webinar about ‘Making Tax Digital for VAT’ on Thursday 21st April 11.45am-12.45pm BST. This webinar will summarise what’s changing for UK businesses, explain how to keep digital records and provide you with basic training on the new tax return software. You’ll need to use this software to submit your digital records online each year going forward.
During the webinar, you’ll be able to ask questions using the on-screen text box and get live responses from HMRC.
Payaca makes accounting easy by integrating with Xero, Quickbooks and thousands of other apps to automatically update your business records. It’s easy to set up, saves you hours of admin and the best part is - when you’re set up, the only action you’ll need to take is clicking the ‘export’ button at the end of the tax year. Easy peasy.
Try Payaca for free and see why thousands of businesses all over the UK are using it to simplify their accounting.
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