Making Tax Digital (MTD) for VAT has been with us for some time now but not all voluntary registered businesses currently file their returns under the new regime. While MTD for VAT will be mandatory for all VAT registered traders from 2022, changes in 2021 will affect VAT registered businesses not yet in MTD.
If you are using accounting software to file your returns you are likely to be filing them under the new MTD system and you can easily check by looking at your software.
HMRC’s VAT records are currently held across two databases and the old mainframe database will cease to be used this year. This means that businesses that are not signed up for MTD will from April either have to:
Submit VAT returns through their Business Tax Account.
Sign up for MTD and file using accounting software.
We recommend the second option as all business will have to file under MTD from April 2022 anyway.