Navigating MTD for VAT
Making Tax Digital
MTD for VAT
If you run a VAT registered business then Sherwin Currid is the ideal partner to help you manage Making Tax Digital for VAT
What is Making Tax Digital for VAT?
Making Tax Digital (MTD) for VAT is a UK initiative that requires VAT registered businesses to keep digital records and submit VAT returns using compatible software approved by HM Revenue and Customs (HMRC). The aim of the whole MTD tax system is to make tax administration more efficient and reduce reporting errors and MTD for VAT is the first phase of this initiative. MTD for VAT came into effect for all businesses registered to pay VAT from April 2022, it is now compulsory to file your quarterly returns through cloud software or make use of bridging software to file online.
If you own or manage a VAT registered business then seeking the help of professional accountants such as Sherwin Currid can be very helpful in ensuring that you are compliant with HMRC’s rules and that you pay the correct amount of VAT. Our team has extensive experience in VAT and small business accounting as well as working with cloud accounting software. If you are looking for an accountant to help you with MTD for VAT then please get in touch for a free consultation where we can discuss how we can help you.
How can Sherwin Currid help with MTD for VAT?
In our team we have VAT experts that are ideally suited to help small business owners and contractors with all of their tax compliance and filings including VAT. We adopted cloud accounting software years before it was mandatory as we believed it was the easiest way for our clients to stay on top of their finances. We online bookkeeping software such as FreeAgent as part of our standard accountancy packages and are also extremely practiced in other software such as Xero and Quickbooks.
All of our clients are allocated a dedicated, personal accountant based on their specific needs who can offer expert guidance on compliance, software integration, and more. Our tax experts have a wide variety of experience across many sectors from ecommerce to construction to IT contractors and landlords. Our team will be able to look after your business and provide you with the necessary support to ensure your compliance and filing is accurate and on time.
How to ensure compliance with MTD
To ensure compliance with MTD for VAT, you must make use of either a cloud accounting software or bridging software to allow you to submit online returns to HMRC. Software such as FreeAgent, Xero and QuickBooks are extremely popular as MTD solutions due to their low cost and accessibility for small business owners. The best way to ensure compliance is to partner with an accountant to ascertain the best software for you to use and allow them to show you how to compile your VAT receipts and invoices. Additionally, these software also offer features such as live bank feeds and bank reconciliation, making managing your books and business much simpler.
At Sherwin Currid our accountants will introduce you to compliant software that allows you to upload receipts and share your companies financial data in real time with your accountant to ensure that your returns are accurate and on time to minimise your VAT liability and ensure compliance.
Cloud accounting software
Cloud accounting software plays a pivotal role in MTD for VAT compliance. With functional compatible software you, as a business owner, can upload all your financial information via your phone on the go which means your accountant will be able to see the data real time. Our team of cloud accounting experts can then give you advice and guidance to allow you to run a successful business with a fraction of the hassle that comes with traditional accountancy methods.
Cloud based software is used to:
- Bring the costs of bookkeeping down
- Track expenses for VAT purposes
- Provide a much simpler bookkeeping service
- Reduce the risk of error in accounting information with the use of automation
- Give access to real time business information
- Enable better business decisions to be made
What software is right for you?
Choosing the right software provider for Making Tax Digital depends on your business needs our three most popular are outlined below:
FreeAgent
A very user-friendly option aimed at contractors. We have had a close relationship with FreeAgent since they started and were one of their earliest accounting partners. We are now a Platinum Partner and have many happy clients using this product.
Xero
Xero is a comprehensive accounting software that offers a range of features to help businesses manage their finances and fulfil their VAT obligations. Its cloud-based architecture, automatic transaction import, invoicing system, reporting options, and integrations with third-party applications make it a powerful tool for businesses of all sizes.
Quickbooks
An offering from Intuit aimed at small and medium sized companies. Similar to Xero it provides simple, smart accounting software that helps you take control of your finances.
Frequently Asked Questions
Businesses with a taxable turnover above the VAT registration threshold of £90,000 as well as those who have voluntarily enrolled, are required to comply with MTD for VAT. This includes sole traders, partnerships, and limited companies. MTD ensures timely and accurate digital record-keeping and VAT submissions from those who are registered, meeting the VAT requirements set by legislation.
If your business is not yet compliant with MTD for VAT, you may face penalties and fines. MTD compliance for VAT is now mandatory and therefore seeking the assistance of an accountant such as Sherwin Currid to put in place compliant software should be a priority.
Sherwin Currid offers expert guidance in transitioning to cloud accounting software, ensuring a seamless and efficient process. Our team of accountants have vast experience working with a variety of clients and UK VAT.
The penalties for not complying with MTD for VAT can be significant. HM Revenue and Customs (HMRC) can impose fines for late filing and errors in VAT returns. It is important for businesses to understand and adhere to the VAT rules and regulations set by HMRC to avoid these penalties.
To ensure your business remains compliant with MTD for VAT, you need to use compatible software that allows you to keep digital VAT records and submit VAT returns. This software should be MTD-compliant and should be able to submit the VAT returns directly to HMRC, a list of such software is available on the HMRC website. Your accountant will be able to advise you to any changes to your obligations and VAT status.
There are currently plans for MTD to be introduced to income tax self assessments starting from the 6th April 2026. Being comfortable with cloud accounting software by then is vital to ensure that you have a seamless transition otherwise you may find yourself wasting time. There are also plans for the introduction of MTD for corporation tax in the future although there has not been a date set out yet for the start of that.
Sherwin Currid Directors
Our founding directors, Martyn Currid and Max Sherwin, set up Sherwin Currid to help freelancers and small businesses with accountancy. Since then we have grown to look after a wide range of clients while keeping our personal, professional service.
Our Client Testimonials
Some of our clients have been kind enough to leave us reviews of our accountancy services. Don’t just take our word for it, read some testimonials to see how we help people with their business and personal tax.
