Making Tax Digital (MTD): what do I need to do now?

/ AIMS News, Quarterly Updates, SME

Author: Henry Ejdelbaum

Tags: Quarterly Update - February 2022

To reiterate, there are changes to MTD coming on 1 April 2022. They will mean that all businesses that are VAT registered will need to make submissions that are MTD compliant regardless of their turnover.

The actions you will need to take regarding MTD will vary depending on how your bookkeeping is handled. If your AIMS Accountant already handles your bookkeeping and your VAT returns, there is no need for you to do anything to prepare for the upcoming changes to MTD. You can skip to the end of this blog.

If you handle your own books using bookkeeping software, you have two options for MTD-compliance. The easiest option might be for your AIMS Accountant is to take over the bookkeeping. They can then make sure that you are fully compliant.

If you want to continue doing your own bookkeeping, you will need to ensure that you are using HMRC compliant software. You will need to confirm with your software provider that they will be HMRC compliant, then make sure your software is up to date.

You will also need to sign up to MTD. To do so you, should read our next blog as we have prepared a guide on how to do this.

How do I sign up to Making Tax Digital (MTD)?

To sign up for Making Tax Digital (MTD), you must go to this link, then click on the green “sign up” button and follow the instructions.

This will ensure you are prepared for MTD. Please be aware that this may increase accounting costs as your AIMS Accountant will need to carry out compliance checks. Handing over your bookkeeping might be the simpler and cheaper option for you.

If you currently do not use appropriate bookkeeping software to manage your accounting records, unfortunately, you will need to overhaul your bookkeeping methods to be compliant with MTD. You will need to look into acquiring HMRC-compliant bookkeeping software as soon as possible in order to avoid penalties, and then take the steps detailed above to sign up to MTD – your accountant can help you with these things.

If you want to avoid the headache of setting up an entirely new system, remember that we are happy to take on bookkeeping responsibilities for you – a cheaper and simpler option for both of us. You might want to take advice on suitable software and your AIMS Accountant is happy to help.

If you have any questions about future developments regarding MTD or related topics, please get in touch with your local AIMS Accountant.