HM Revenue & Customs has repeatedly asked sellers to file MTD VAT returns, so it seems that there is nothing to stop MTD tax returns from being filed.
So what is MTD, what are the variations of MTD and do I have to use it? How does it affect the seller?
Today, the green circle on the seller concerned about the key issues one by one to answer the popular science ~
HM Revenue & Customs (HMRC) issued its VAT digitization policy on April 1, 2019, a measure proposed by the UK government for the 2020 implementation of tax returns and tax reforms.
On January 7, 2022, HM Revenue & Customs (HMRC) issued another notice urging businesses that are already registered for UK VAT to register for VAT by April 1, 2022, and must register to file VAT returns using the Digital VAT Return (MTD) system.
Below is the notification email from HMRC:
According to HM Revenue & Customs, the main purpose of MTD is to make tax administration more effective, efficient and simple for taxpayers.
01
NEWS
What is MTD?
The full name of MTD is Making Tax Digital, which is translated into Chinese as: Electronic Tax Declaration.
HM Revenue & Customs (HMRC) has reformed the existing system by introducing MTD in order to realize the electronic development.
MTD software can digitally store all of a user's reporting data, thereby improving the accuracy of business records and reducing errors.
At the same time, the UK tax authority can always retrieve data through the tax electronic system for tax audit, if the seller uses false invoices or credit documents, then the probability of being investigated increases, reducing the difficulty and time cost of the audit.
02
NEWS
MTD reporting changes that must be used?
In April 2019, HMRC began requiring companies with annual sales of more than £85,000 to file tax returns using MTD software.
If a seller's sales do not reach the starting point of 85,000, the seller can voluntarily choose whether or not they need to register for MTD, and those who meet the criteria will be required to use it.
And according to HMRC's latest circular, all businesses with a VAT filing obligation must digitize their tax returns, and from April 2022 MTD will be fully covered.
This is mandatory regardless of whether the turnover exceeds £85,000 and is subject to a VAT return using MTD.
Note that this means that from April 2022 any UK seller with a VAT will have to file using MTD.
MTD returns require sellers to store electronic business records and submit them using officially licensed HMRC software; paper-based records will no longer meet the statutory requirements.
Regarding the other VAT policies, they remain unchanged and sellers are required to submit data and reports on time according to the existing regulations and deadlines.
Therefore, sellers need to be aware before the next tax filing deadline that.
(1) Select an IRD-authorized e-filing software;
(2) Register the MTD of VAT as per the guidelines of IRD official website;
(3) Authorize MTD to the software of your choice;
(4) Ensure that the same software is used for the next filing.
HM Revenue & Customs enquiry website:
https://www.tax.service.gov.uk/making-tax-digital-software?_ga=
The steps for enquiring about certification are as follows:
1. Copy the above URL and open the UK tax website.
2, in the "Search software by name" column enter "kxtvat", click kxtvat can be found in the green circle for the British tax official software, click the link to jump directly to the green circle official website.
By then, you only need to register and purchase the required business to make online MTD digital declaration~
The repeated urging and advocacy of MTD by HMRC shows its determination to implement VAT digitization (MTD), which has to a certain extent changed the traditional way of VAT registration and filing.
The use of MTD digital filing for cross-border sellers' tax compliance will also become the mainstream mode of VAT filing.
All the general trend, sellers have to follow the trend trend forward, for MTD digital declaration there are other needs to understand, you can consult the Green Circle dedicated account manager, for detailed consultation.
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