Making Tax Digital (MTD) for VAT entered phase two as of 1 April, 2021. And that’s good news – or it can be – for businesses that grasp the opportunity to improve systems and processes for VAT.
Since 2019, UK businesses have been required to store VAT records digitally, and submit VAT returns to HMRC via Application Programming Interface (“API”) enabled software. In this next phase, businesses must have digital links between their digital records and submission of their VAT return.
With the 2021 required regarding digital linking now live, it’s a great time to look at where your business is in terms of your MTD obligations and how you can set yourself up for compliance and continued benefits. Without action and continued focus on these regulations, your perceived behaviours as a taxpayer will be impacted, which may in turn lead to increased scrutiny and penalties.
Source PwC
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