Effective from Monday, May 15, 2023, there is an important update regarding the filing of VAT returns for all VAT-registered businesses. If you are not currently using Making Tax Digital (MTD) compatible software, you will no longer be able to utilize your existing VAT online account to submit manual VAT returns. This change is a legal requirement, and it mandates that all VAT-registered businesses must adopt MTD-compatible software to maintain their VAT records and file VAT returns.
To avoid penalties, it is crucial for businesses to take immediate action. Here are the steps you need to follow:
Step 1: Select MTD-compatible software that suits your business requirements. We encourage you to reach out to us without delay for guidance and assistance in making the right choice.
Step 2: Verify that the software you choose has the necessary permissions to work with MTD. Visit GOV.UK and search for ‘manage permissions for tax software’ to access information on how to proceed with this step.
Step 3: Ensure that you maintain digital records for your current and future VAT returns. Detailed information about the specific records that need to be kept digitally can be found on GOV.UK.
Step 4: File your future VAT returns on time using MTD-compatible software. Refer to GOV.UK to learn about the process for submitting your VAT returns.
Please be aware that failing to file your VAT returns on time through compatible software may result in penalties. Starting from January 1, 2023, HMRC has introduced new penalties for late submission of VAT returns and late payment of VAT for VAT accounting periods. Additionally, changes have been made to the way interest is charged.
It is essential to comply with these regulations to avoid any penalties or adverse consequences. For further information and guidance, please reach out to us.
You can find more information about new VAT penalties on GOV.UK or by watching a recorded webinar for businesses.