Making Tax Digital (MTD) is a UK government initiative that aims to modernize the tax system by requiring businesses and individuals to use digital means to keep their records and submit their tax returns to HM Revenue and Customs (HMRC). The goal is to make the tax system more efficient and reduce errors by using digital technology. Under MTD, businesses and individuals will be required to keep digital records and submit their VAT returns through compatible software. This will be phased in starting in April 2019 for VAT-registered businesses with a turnover above the VAT threshold and will be mandatory for all businesses by April 2020.
Overview: Making Tax Digital Facts
- MTD requires every VAT registered business to record and submit VAT returns electronically using ‘functional compatible software’.
- Companies must use software to keep digital records of specified VAT-related documents.
- Stored records must include designatory data and summary VAT data for the period.
- Use of multiple pieces of software is allowed.
- The format of the VAT return is a 9-box summary, filed via the HMRC’s JSON API platform, which must be digitally linked between the customer’s source data and the submitted digital return. Businesses receive and send information to HMRC via API.
- Each business must set up a new digital tax account and should follow a new authentication process.
Submission of digital records can be in a range of digital formats, including XML, CSV, and Excel, provided they are API enabled.
What Are the Penalties for Not Complying with MTD?
The penalties for not complying with Making Tax Digital (MTD) can vary depending on the specific situation. Generally, if a business or individual is required to use MTD but fails to do so, they may be subject to penalties from HM Revenue and Customs (HMRC). These penalties can include fines and additional interest on unpaid taxes. Additionally, if a business or individual is found to be non-compliant with MTD, they may be required to pay back any outstanding taxes and may also be subject to criminal prosecution. It is important to note that the penalties for not complying with MTD will be determined on a case-by-case basis and will depend on the specific circumstances of the non-compliance. Contact the MTD experts at Affinity Associates today at +44-20-8903-2077.
Making Tax Digital VAT
Affinity Associates is the most reputable small business accounting services provider in the UK. It has been more than 40+ years since we are offering affordable accounting services, bookkeeping services, and all other finance related services to businesses across the UK. With so many years of industry presence, we understand UK Tax laws and compliance at the best.
Whatever is your business, whatever is the size of your business, if you need any help related to “Making Tax Digital VAT”, just get in touch with our MTD experts. We assure you to offer the best support and instant response to all your queries related to Making Tax Digital VAT.
Need Urgent Help? Talk to Making Tax Digital Experts
If you run a VAT-registered business with a taxable turnover above the VAT registration threshold (currently £85,000) you are required to keep digital VAT business records and send returns using MTD compatible software. However, if MTD is complex for you to understand, then help is just a call away. Call Making Tax Digital experts at Affinity associates for instant help at +44 20 8903 2077.
To learn more about how Affinity Associates can help you with Making Tax Digital VAT, please visit their official webpage at https://bit.ly/3ZWCkQo.