You need to change the way you submit your VAT returns
30 December 2020, Advocates, Barristers, Companies, Creative Industries, General, Sole Traders
Action required by 8 April 2021
If you haven’t signed up for Making Tax Digital (MTD) yet, you need to change the way you submit your VAT returns.
Even if you currently use Xero to file your VAT returns, you won’t be able to use software to file returns from 8th April unless you are already signed up for MTD.
What do I need to do now?
If you currently use software to file your non-MTD VAT returns you can either register for the MTD regime or speak to your accountant to make sure that returns can be filed after the end of March. The reason for the change is a software and systems upgrade by HMRC. Most VAT registered businesses are already signed up for MTD so they will not be affected by HMRC switching off XML returns.
When do I need to start thinking about changing my systems?
Don’t count on the deadline being extended beyond 8th April 2021. The timing of the new IT system is independent of Brexit and COVID. If you don’t have a plan in place already, please make sure you act now. If your VAT quarters are December, March etc, the December 2020 VAT return might be the last one you can file using your current method.
How can Alterledger help change the way you submit your VAT returns?
Alterledger can sign you up for MTD and convert your accounting systems to Xero online accounting. If you are already on Xero we can change the way you submit your VAT returns to ensure that you comply with MTD regulations before they become compulsory in April 2022.
What if my turnover is already over £85,000?
If you are a business with a taxable turnover above £85,000, you should already be following the MTD rules.
You must do all of the following:
- sign up to MTD
- keep digital records
- submit your VAT Returns using MTD compatible software
If you are a business with a taxable turnover above £85,000, you should already be following the MTD rules.
Am I in the clear if my turnover is below £85,000?
If your taxable turnover is below £85,000, you can sign up for MTD voluntarily before April 2022. From April 2022 all VAT businesses, no matter what their taxable turnover is, must sign up to MTD.
It is our recommendation that all VAT registered businesses sign up for MTD by 1st April 2021. This will ensure that you can still file your VAT returns through software. You will also be safe in the knowledge that you won’t have to change your systems again in 2022 when MTD becomes compulsory.
