MTD for ALL VAT registered businesses

On 21 July 2020 HMRC updated previously published guidance on MTD to confirm that from 1 April 2022 ALL businesses that are registered for VAT will be required to maintain records on and submit VAT return using MTD compliant software.

Links to this revised guidance are below but HMRC have yet to update or amend the guidance within the VAT Notice 700/22 ”Making Tax Digital for VAT”.

Making tax digital 

Rules of making tax digital for VAT

This is a change to the previous rules that only those VAT registered businesses with a taxable turnover of £85000 or more were required to use MTD.

Businesses that were registered for VAT but with a taxable turnover below £85000 could continue to use systems and submit returns outside of MTD, although could chose to adopt MT if they so wished.

Although this change is not yet imminent and has been announced significantly in advance, businesses that are not yet using MTD will need to prepare in the interim or consider whether they wish de-register before 1/4/2022 if they can.

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