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Making Tax Digital for VAT

8 Apr 2022

Keeping Digital Records and Submitting Your VAT Return to HMRC

Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs. All VAT-registered businesses are required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns. Compatible software must be used that can link to HMRC systems to file a VAT Return.

If Spreadsheets are used to record your transactions digitally, then you will need to use bridging software that links your spreadsheet prepared VAT return to HMRC systems.

Records you must keep digitally

You need to keep the following records digitally:

  • your business name, address and VAT registration number

  • any VAT accounting schemes you use

  • the VAT on goods and services you supply, for example everything you sell, lease, transfer or hire out (supplies made)

  • the VAT on goods and services you receive, for example everything you buy, lease, rent or hire (supplies received)

  • any adjustments you make to a return

  • the ‘time of supply’ and ‘value of supply’ (value excluding VAT) for everything you buy and sell

  • the rate of VAT charged on goods and services you supply

  • reverse charge transactions - where you record the VAT on both the sale price and the purchase price of goods and services you buy.

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