In this article we will explain what Making Tax Digital (MTD) is, who it applies to, and how to prepare for it.
Even if you’ve been using FreeAgent to file your VAT returns for a while, you still need to manually switch over to Making Tax Digital (MTD) for VAT filing. Find out how to do that here.
What is Making Tax Digital?
Making Tax Digital is a government initiative aiming to digitise the UK tax system.
Who is required to join?
HMRC requires businesses with turnover above the VAT threshold to start taking part in MTD. If this applies to you, you'll have to file all VAT returns as of 1st April 2019 through Making Tax Digital for VAT.
When should I join?
Once you have joined, you'll need to submit your next VAT return using the new MTD submission process. HMRC advise signing up at least one week before your VAT return is due, to make sure that everything is ready for your submission.
Remember, you are only required to file VAT returns as of April 1st 2019. If you have a return that covers a period that begins before April 1st 2019, you can still submit it using your current method.
Who is eligible to join?
If your turnover is below the VAT threshold, you can still file your VAT returns through MTD if you wish.
Who to speak to if you’re unsure?
If you have an accountant, they’ll be the best person to advise you on how to proceed. If you need an accountant, check out our directory of accountants.
How do you set up your account for MTD for VAT?
Find out how to set up for MTD for VAT in our handy guide.