MTD Manual Blog

Understanding MTD for VAT: A Beginner's Guide

Making Tax Digital (MTD) is a significant change in the way businesses and individuals interact with HMRC. As of April 2019, all VAT-registered businesses with a taxable turnover above £85,000 are required to keep digital records and submit their returns using MTD-compatible software.

In this blog post, we will provide an overview of what MTD means for your business and how it affects you. We'll also cover the key benefits and challenges of implementing MTD for VAT.

MTD for VAT: What You Need to Know

HMRC has introduced a new system called Making Tax Digital (MTD) which requires businesses to keep digital records and submit their returns using MTD-compatible software. This change affects all VAT-registered businesses with a taxable turnover above £85,000.

The main goal of MTD is to simplify the tax process by providing accurate and timely information to HMRC. It also aims to reduce errors and improve compliance.

How to Prepare for MTD for VAT

To prepare for the implementation of MTD, businesses need to ensure they have the necessary digital tools and software in place. This includes accounting software that is compatible with HMRC's MTD system.

It's also important to note that HMRC will not accept any paper-based VAT returns after April 2019. Therefore, it's crucial for businesses to adapt to this new system as soon as possible.