Summary

Under Making Tax Digital (MTD) for VAT, businesses are required to file their VAT returns electronically using accounting software and need to keep digital records of their transactions.

MTD was mandatory from April 2019 for businesses with a taxable turnover above the VAT registration threshold, currently £85,000.

In April 2021 if your business is voluntarily registered for VAT, but you’re not registered for MTD, needed to make manual VAT submissions using the HMRC website portal, or register for MTD.

From April 2022, all VAT registered businesses must sign up for MTD for VAT, even if their taxable turnover is below the VAT registration threshold.

What do I do?

You’ll be required to comply with HMRC’s Making Tax Digital (MTD) rules. This includes:

• Signing up with HMRC for MTD for VAT.
• Ensuring you have MTD for VAT compliant software.
• Maintaining digital business records for the purposes of VAT.
• Submitting VAT Returns through compliant software.

If your business is affected and you’re not currently registered for MTD, there are a few options available to you:

Register for MTD – You should ensure you have MTD compliant software before you register. If you’re already using Sage 50cloud Accounts, your software is MTD compliant.

Use an accountant for VAT submissions – Your accountant may be able to submit VAT Returns on your behalf through their Agent Services Account.

Deregister for VAT – We recommend you speak to your accountant for advice on which option is best for you.

Help and support for Making Tax Digital can also be viewed on the GOV.UK website directly.

Switch on Making Tax Digital VAT submissions in Sage 50 Accounts

1. Click Bank accounts and select the required bank account from the list.
2. From the toolbar click Reconcile then click Reverse a reconciliation.
3. Click the relevant reconciliation from the list then click Reverse reconciliation. **Note: If you reverse a bank reconciliation that has any subsequent reconciliations, these reconciliations are also reversed.
4. Click Yes then complete the backup process.
5. Click Yes to confirm bank reconciliation reversal.

When you next submit your VAT Return it will submit under MTD.

Further Information

If you have any questions about this or need assistance, then please contact the GCC Group Support Team on 0345 260 1151 or servicedesk@gccgroup.co.uk