When entering a period of disruption, we’re often encouraged to look at the bigger picture.
Yes, moving house is a pain, but the additional space and plush en-suite is worth the hassle. Yes, government-mandated Making Tax Digital (MTD) for VAT means digitising your taxes, but it’ll make the process more efficient and empower you to embrace digital tools to improve your business.
While these points are all true, and point to the longer term benefits of the hard work you put in today, sometimes you just want to know about the practicalities – the smaller picture. How will I relocate this bulging box of crockery unbroken to my new home? How can I make sure my small business is MTD for VAT compliant?
With this in mind, we’ve provided a quick guide on how to sign up your small business for MTD, tackling the smaller picture so you can look ahead to the big one.
When do I need to sign up for MTD for VAT?
First, how quickly do you need to get your skates on? The answer is: pretty quickly. Unless exempt, all VAT registered businesses, including sole traders, limited companies, partnerships, landlords and LLPs, must sign up for MTD for VAT from April 2022. This is irrespective of their levels of turnover,
If you own or run a business that isn’t VAT registered, you don’t have to sign up until MTD for ITSA comes into effect from April 2024. MTD for corporation tax, meanwhile, will arrive no sooner than April 2026.
How do I register and sign up for MTD for VAT?
If you’re taking your first tentative steps towards tax digitisation, you first need to register for MTD for VAT. To do this, make sure you have MTD compliant software, like Xero.
If you’re yet to adopt the relevant tool, head to the gov.uk website which has a handy list of HMRC-approved software to help you find out more. Then, you’ll need to submit your final non-MTD VAT return. You can find more information on what you need to register here.
To sign up for MTD for VAT, head to this link. There, you’ll need to select how you currently keep your VAT records. You can also use bridging software to connect your spreadsheet to HMRC if you don’t want to move over to full MTD software yet, though this may not be an ideal long-term solution.
At this stage, you’ll be redirected to the HMRC website and here’s what to do next:
Sign in to your Government Gateway account.
Confirm your business type (sole trader, limited company, general partnership, etc) and enter the relevant tax references.
Add details of how you would like to be contacted by HMRC.
Make sure all the information you’ve inputted is correct.
Submit your application, and expect to hear from HMRC within three working days. If you don’t, be sure to check your spam folder because you’ll want to know for sure your MTD journey has begun.
And you’re all set! With the smaller picture taken care of, you can start considering the bigger impact of digitising taxes – including improved efficiency, and the streamlining of a once-onerous task. If you want to learn more about MTD for VAT, check out some of our other resources for small businesses.
The post How small businesses can sign up for Making Tax Digital for VAT appeared first on Xero Blog.
When entering a period of disruption, we’re often encouraged to look at the bigger picture.
Yes, moving house is a pain, but the additional space and plush en-suite is worth the hassle.
The post How small businesses can sign up for Making Tax Digital for VAT appeared first on Xero Blog.Read MoreSmall business, Making Tax Digital, MTD, MTD for VATSmall business – Xero Blog