As you may have heard, HM Revenue & Customs have already started implementation of MTDfV, however, the first phase introduced a couple of years ago was only necessary if your VAT registered business had a turnover above the VAT threshold, currently £85,000.
If your business is VAT registered, but is not already filing MTD VAT returns, in the not too distant future, it will become mandatory to file these directly via compatible software.
So what is MTDfV?
In short, if your business is VAT registered, it will need to file VAT returns directly from MTD compatible software. Within the software, there should be a digital record of daily takings, business expenses and ideally (although not essential) the business bank account transactions.
When does it become necessary?
MTDfV becomes mandatory for the first VAT return period starting on or after 1 April 2022, so if you have a VAT return quarter ended 30 April, your first MTD VAT return would be the quarter ended 31 July 2022. If you would like to trial the new system or get all or your financial years VAT returns on the same system, you can sign up earlier if you wish.
The choice is yours, however, after many years of using software, we have found for many businesses, Xero is straight forward, using non-accounting terms and users learn to love it, having financial reports at the touch of a button – no more adding up manually! Others are available, such as Sage, Quickbooks & Free Agent, to name but three. The cost of Xero is currently either £12 + VAT or £26 + VAT per month, depending on your needs, with Sage & Quickbooks of a similar price. If you have a Business Current Account with Natwest, RBS or Ulster Bank, then Free Agent should be free of charge. If you have staff, Payroll can be added to most software (at additional monthly cost).
Can we help?
Yes. If you need assistance with setting up any software, want to look at the different software available, or need help with the entry of day to day transactions, or need informal training on the software of your choice, then we are here to help. As an alternative, we can also do the VAT data entry and return submissions for you. Whatever help you need, just contact us and we will be happy to help in whatever way we can.
All this may sound daunting a first, however, for many of the businesses we have already helped onto software, they are now finding that they can submit VAT returns with ease.
If you want to discuss in more detail, then contact us.