From April 2022, Making Tax Digital for VAT will apply to all VAT-registered businesses. Here we explain the pros and cons of voluntary VAT...
Making Tax Digital deadlines - key dates to know
Key dates for Making Tax Digital
Key dates for Making Tax Digital
Deadlines can cause stress but don’t worry, here we explain the MTD deadlines that are coming up so you can stay compliant.
- April 2022: MTD for VAT was extended to all VAT-registered businesses, including VAT voluntary registered businesses. This means that in order to be MTD for VAT compliant, any business or individual will have to:
- Sign up to Making Tax Digital
- Keep their records digitally
- Submit their VAT return information to HMRC through MTD compatible software
It’s important to mention that this includes businesses below the £85,000 VAT registration threshold. Lots of other VAT registered businesses have already complied. All you need is MTD for VAT compliant software, like Powered Now, which will then link your business's data digitally to your VAT return.
Have you tried Powered Now?
Powered Now fully supports MTD for VAT.
- January 2023: The new Making Tax Digital penalty points system will come into effect. This means that those who regularly make mistakes and/or miss deadlines will earn penalty points. At a certain threshold of points, a financial penalty of £200 will be applied.
- Annual: 2 points
- Quarterly: 4 points
- Monthly: 5 points
- April 2026: Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) will take effect for all self-employed people and landlords with sales of over £50,000 per annum. They must register for Making Tax Digital for Income Tax Self Assessment and start making quarterly submissions. Exemptions from MTD for ITSA include: non-resident companies; trustees, executors and administrators; and foreign businesses of non-UK domiciled individuals.
All businesses will have to provide quarterly updates and the deadlines for quarterly returns under MTD for ITSA will be:
- August 5 for the period from April 6 to July 5
- November 5 for the period from July 6 to October 5
- February 5 for the period from October 6 to January 5
- May 5 for the period from January 6 to April 5
- April 2027: Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) will take effect for all self-employed people and landlords with sales of between £30,000 and £50,000 per annum.
- After April 2027: MTD for ITSA will eventually apply to partnerships but no date has been set yet. In addition, there has been no decision made on sole traders with less than £30,000 per annum sales - they may even never have to comply. Similarly, there is no timetable for the introduction of Making Tax Digital for Corporation Tax (CT) for limited liability companies.
How to prepare for MTD for VAT
Preparing for Making Tax Digital for VAT, is really simple. You’ll just need to follow these steps:
- Select a compatible software for MTD for VAT, like Powered Now
- Sign up for MTD for VAT
- Activate that feature in your MTD for VAT software (if you are using Powered Now, do not hesitate to contact us if you have any questions)
- Keep digital records starting from 1st April 2022 or the beginning of your VAT period
- Submit your VAT return through Making Tax Digital
If you are a sole trader and have sales over or near £50,000 per annum, investigate your options.
We are happy to help. If you have any questions, you can contact us or leave a comment below and we will answer as soon as possible.