Remember when the government introduced plans for tax & VAT returns to be completely paperless? The deadline for that initiative is soon approaching, and companies across the country are scrambling to make sure they comply with the new normal. Is there still time to sign up to the MTD deadline?
It’s easy to forget deadlines that HMRC put in place years in advance.
The new study revealed that more than a quarter (27%) of UK SMEs had missed the tax deadline set by HMRC, with one in three (34%) delaying their financial administration to the last minute.
Listen, we’ve all been caught out last minute. But, we can bring you up to speed just in time to become the lucky 73% who do not miss tax deadlines!
What is the MTD deadline?
Back in 2019 – Making Tax Digital for VAT was introduced. This involves keeping digital records and accounting software to complete VAT tax returns.
This means that all VAT-registered businesses will need to comply with Making Tax Digital for VAT from April 2022, which is next week.
This bold move by HMRC will only affect VAT returns for now, but there is another deadline for two years. From April 2024, Self Assessment taxpayers will need to comply with Making Tax Digital for income tax, not just VAT.
Here’s to hoping that there won’t be Brexit, a global pandemic, a general election or a war until then so your business can focus on that deadline.
Nevertheless, let’s get into how you can comply with the changes on April the 1st.
What are the first steps to take towards this compulsory digital move?
You may be thinking: How can I make sure I’m not missing any crucial steps in the tedious VAT returns process, especially with transferring them to digital files?
The first step is to sign up to MTD on the GOV.UK website.
As of today (March the 25th), you CAN still sign up to MTD – but the deadline is March the 27th, which is five days until the deadline. So, today is the day if you haven’t already!
What will you need to sign up for MTD?
Your business email address
Government Gateway user ID and password – if you do not have a user ID, you can create one when you use the service.
Your VAT registration number and latest VAT return
Your National Insurance number if you’re a sole trader
Your company registration number and Unique Taxpayer Reference if you’re a limited company or registered society
Your Unique Taxpayer Reference and the postcode where you’re registered for Self Assessment if you’re a general partnership
Your Unique Taxpayer Reference, the postcode where you’re registered for Self Assessment and your company’s registration number if you’re a limited partnership
You will also need to supply information on your software of choice for future VAT returns.
What software is good to use for MTD?
We recommend using TaxCalc for all of your MTD compliance. TaxCalc is the biggest independent tax and accounting software company in the UK.
TaxCalc eSign Centre dramatically reduces the time spent obtaining client approval for tax returns, VAT returns, and other documents. Send over an electronic copy of the document, ask the client to check and sign – eSign Centre will notify you immediately, and you can submit the document straightaway.
We may be biassed, but the TaxCalc eSign package offers the best features to aid you at every step, guaranteeing you a grey-hair free return process.
What features of Signable & TaxCalc are useful for MTD?
A personal online assistant with a smart, intelligent validation tool. Check & Finish highlights any errors.
The eSign Centre will create a recipient list based on client data held in Practice Manager.
A centralised control centre where you can see all envelopes you’ve sent – and to whom.
Multiple signers. Multiple documents. One envelope.
Be part of the signing process by adding yourself as a recipient to the signing process.
Final word on the MTD deadline:
As you may have probably realised by the end of this blog, the MTD process ultimately boils down to signing up on the GOV.UK site & choosing an appropriate MTD software may not be as arduous as expected.
It’s also important to note that the benefits of transferring all of your HMRC returns to digital forms will save you money & time in the long run, even if the initial process is a little bit tedious.
The MTD initiative by HMRC will mean thousands of businesses in the UK can fully embrace digital cloud accounting systems and will be able to streamline their accounting tasks.
Going digital may be a daunting process, but there is plenty of help & support available as you embark on the process: less paperwork and more quality time with family and friends.
Who knows, you may even look forward to filing VAT returns in the future!