HMRC: Less than one week to go for Making Tax Ditigal
Businesses have less than a week to prepare for Making Tax Digital (MTD) for Value Added Tax (VAT) becoming mandatory for VAT-registered businesses on 1 April, HMRC has revealed.
MTD helps taxpayers get their tax returns right by reducing common mistakes as well as saving time managing their tax affairs and is a key part of the overall digitalisation of UK tax.
Evidence shows MTD is succeeding in its central aims of reducing errors, while also making it faster to prepare and submit returns, and boosting productivity for businesses. New research, conducted by HMRC and peer-reviewed by independent academics, shows MTD is likely to have generated increased revenue by reducing errors in both 2019 and 2020.
Nearly 1.6 million taxpayers had joined MTD for VAT as of December 2021 with more than 11 million returns successfully submitted. Around a third of VAT-registered businesses with taxable turnover below £85,000 have voluntarily signed up to MTD for VAT ahead of April 2022, and thousands more are signing up each week.
VAT-registered businesses that have not yet signed up to MTD for VAT should do so now. All VAT-registered businesses must use MTD for VAT for their first VAT return starting on or after 1 April 2022. Businesses should use the time left to choose the software that is right for them, whether that is one of the simple free options available, or a more advanced product for those with more complex affairs.
Lucy Frazer, HM Treasury’s financial secretary to the treasury, said: “Businesses using MTD are saving time on their tax affairs, streamlining their processes and boosting their productivity as a result.
“Our first move towards a modern, digital tax service – MTD makes it easier for businesses to get their tax right first time.”