The next phase of Making Tax Digital for VAT will affect all small businesses so getting ready for the change is vital. Glen Foster, director, small business & accounting partners, Xero, provides useful tips
Small businesses across the UK face a period of uncertainty, but strong signs that fresh lockdowns will be avoided mean they will have their sights set firmly on driving growth.
As economic fluctuations impact small business owners, it would be understandable for other changes to go under the radar. And one of the most notable changes for small businesses in 2022 is the next phase of Making Tax Digital (MTD) for VAT – something they simply cannot afford to overlook.
As accountants will undoubtedly be aware, this next phase means that businesses with a taxable turnover under £85,000 will have to start maintaining records digitally and file VAT returns through HMRC-recognised software from April. These changes will impact hundreds of thousands of businesses, who must comply or face fines.
