End of ‘soft landing’ period for Making Tax Digital for VAT
Since 1 April 2019, Making Tax Digital (MTD) for VAT has required all VAT-registered businesses with taxable turnover above the VAT registration threshold of £85,000 to keep records digitally and file their VAT Returns using software.
HMRC gave a two year ‘soft landing period’ to help businesses put digital links in place between all parts of the functional compatible software they use for keeping records digitally and filing VAT Returns. During this period, if a digital link was not established, HMRC accepted the use of ‘cut and paste’ or ‘copy and paste’ as being a digital link.
The ‘soft landing period’ is now coming to an end and businesses are required to have digital links in place for their first VAT Return period starting on or after 1 April 2021.
The next stage of MTD for VAT is due to take effect from April 2022 and will extend the MTD requirements to smaller VAT registered businesses that are below the registration threshold.
For further information on MTD, please contact Andrew Kershaw on 023 8046 1245.