These obligations were due to be implemented on 1 April 2020 but they were postponed by the Covid-19 pandemic. For the first time, the obligations are accompanied by the threat of penalties. This article explains who will be affected and what the obligations are.

Who is affected?

VAT-registered businesses, individuals and charities with a taxable turnover above the VAT registration threshold (£85,000) are required to follow the MTD rules by keeping digital records and using compatible software to submit their VAT returns.

Where taxable turnover is below the VAT threshold they can voluntarily join the MTD service now but from April 2022 all VAT returns will need to be completed and submitted using compatible MTD software. The Azets MTD for VAT bridging tool in our CoZone client portal can be used to complete and submit VAT returns to HMRC and is fully compliant with the new rules.