VAT Returns & MTD

Making Tax Digital for VAT

Value-Added Tax (commonly known as VAT) is a consumption tax levied on the value of goods and services at each stage of production and distribution. It is applied at every step of the supply chain, from the sale of raw materials to the final purchase by the consumers. Funds from VAT contribute to a significant resource for the UK government.

Businesses and sole traders who have a turnover of more than £90,000 per year must legally register for VAT with HMRC. Businesses can choose though to register for VAT if their turnover is less than this, but they are not legally obligated to do so.

As a VAT-registered business, you must add VAT onto the price of most goods and services (there are certain exemptions) and keep accurate digital records for filing MTD (Making Tax Digital) returns to HMRC. This process is usually done on a quarterly basis and any late submission past the VAT deadline can lead to penalties and interest charges from HMRC.

From 6th April 2026, MTD rules are being extended to Income Tax. If you are a sole trader or landlord with an annual income above £50,000 per year, you will need to be fully signed up before this date. Further phases will follow. From April 2027, those earning over £30,000 must comply and from April 2028, those earning over £20,000 must also follow these rules. Wapping Accountants can support with registration and in the provision of MTD-compatible software.

For a free, initial consultation to discuss your specific requirements, please do get in touch either via the Contact page, via email at enquiries@wappingaccountants.co.uk or by telephone on 07725044175