VAT records for Making Tax Digital

From the 1st of April 2022, all VAT registered businesses must abide by the Making Tax Digital for VAT (MTD) rules by making their tax records digital. 

The records that need to be kept digital are: 

• 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 
• Your total daily gross takings if you use a retail scheme 
• Items you can reclaim VAT on if you use the Flat Rate Scheme 
• Your total sales, and the VAT on those sales, if you trade in gold and use the Gold Accounting Scheme 

It is required that all the businesses’ transactions are made digital. However, paper records such as receipts and invoices do not need to be scanned. 

It’s worth noting that making all records digital may not be viable for some companies and in these cases, they can apply for exemption. 

To make records digital, there are a variety of different software packages that connect to HMRC. To find our more please speak to Darshil Shah on Darshil.shah@shawgibbs.com or 020 3005 7189.