Business news
 

Making Tax Digital for VAT measures to be extended to all VAT registered businesses in April 2022

Making Tax Digital for VAT measures to be extended to all VAT registered businesses in April 2022
Dan Martin
Dan Martin
Freelance content creator & event host
Dan Martin Content & Events
 

Posted: Tue 21st Jul 2020

Measures requiring businesses to submit VAT returns via digital means will be extended to all companies from April 2022.

Under current rules, most VAT-registered taxpayers with a turnover above the VAT threshold of £85,000 have needed to keep their VAT records digitally and update HMRC through secure software since Apri 2019. Over 1.4m taxpayers have used the system to submit more than 6m returns.

The requirement is part of the government's Making Tax Digital (MTD) strategy which aims to see the end of the tax return and transform the tax system.

Ministers today set out the next steps for the programme. From April 2022, MTD will be extended to all VAT registered businesses with turnover below the VAT threshold, and from April 2023, it will apply to unincorporated taxpayers who file income tax self-assessment tax returns for business or property income over £10,000 annually.

The government will also consult in the autumn on extending MTD to corporation tax paid by incorporated businesses.

HM Revenue & Customs will expand its pilot service from April 2021 to allow businesses and landlords to test the service before the requirement to join. The government estiminates that adopting MTD will cost businesses an average £175 with an additional annual cost of around £20.

Financial secretary to the Treasury, Jesse Norman, said: "We are setting out our next steps on Making Tax Digital today, as we bring the UK's tax system into the 21st century.

"Making Tax Digital will make it easier for businesses to keep on top of their tax affairs. But it also has huge potential to improve the productivity of our economy, and its resilience in times of crisis."

A written ministerial statement making the announcements says "the government remains committed to extending Making Tax Digital to other taxes".

The government also claims MTD reduces tax return mistakes which cost the exchequer £8.5bn in 2018-19.

 
Dan Martin
Dan Martin
Freelance content creator & event host
Dan Martin Content & Events
 
I'm a freelance content creator and event host who helps small businesses and the organisations that support them. I have 18 years of experience as a small business journalist having interviewed hundreds of entrepreneurs from billionaires like Sir Richard Branson to the founders behind brand new start-ups. I've worked for a range of leading small business publications and support groups, most recently as head of content at Enterprise Nation where I was responsible for the prolific output of content on the company's blog and social media. I'm based in Bristol where I run and host regular events with the local small business community and have strong connections to major business organisations in the south west region. In total, I've hosted over 50 events; from intimate meet-ups to conferences with an audience of hundreds including events for international brands like Facebook and Xero. I'm also a big fan of podcasts having hosted Enterprise Nation's Small Business Sessions as well as lots of online events including Facebook Live interviews, webinars and three live web chats from inside 10 Downing Street. With my partner, I co-run Lifestyle District, a lifestyle blog focused on culture, art, theatre and photography. I'm here to help. I'm volunteering free advice calls of up to an hour as part of the Recovery Advice for Business scheme, over the next 6 months. Please get in touch to see how I can help your business. 
 

You might also like…

Start your business journey today

Take the first step to successfully starting and growing your business.