{"id":21842,"date":"2023-06-18T12:00:22","date_gmt":"2023-06-18T12:00:22","guid":{"rendered":"https:\/\/www.bluedotcorp.com\/blog\/what-is-input-vat-copy\/"},"modified":"2023-08-13T11:55:27","modified_gmt":"2023-08-13T11:55:27","slug":"vat-bridging-software","status":"publish","type":"post","link":"https:\/\/www.bluedotcorp.com\/blog\/vat-bridging-software\/","title":{"rendered":"How Does VAT Bridging Software Streamline Your Tax Obligations?"},"content":{"rendered":"

Is your business VAT registered? Or are you heading towards the current VAT threshold of \u00a385,000 taxable turnover within your accounting period and planning to register for VAT? If so, you need to know about the HMRC Making Tax Digital (MTD) platform and its requirements for submitting your VAT returns and managing your accounting software.<\/span><\/p>\n

As a VAT-registered company, you must <\/span>keep digital VAT records<\/span><\/a> and use software compatible with MTD to submit your returns. It is mandatory for your business, or any agents you\u2019ve hired to handle your VAT returns, to submit those returns using MTD. You must comply with MTD requirements to avoid unnecessary penalties and ensure your business runs smoothly. To do this, it\u2019s important to know exactly how MTD works, the role of VAT bridging software, and why all these solutions come together to streamline your tax obligations.<\/span><\/p>\n

Understanding the UK’S Making Tax Digital (MTD) Initiative and its Impact on VAT<\/b><\/h2>\n

If you have registered for VAT<\/span><\/a>, you earn over the taxable turnover threshold of \u00a385,000 and can charge VAT on your goods and services. You will need to file a\u00a0<\/span>VAT return online<\/span><\/a>. Part of this process will require that you register for MTD.<\/span><\/p>\n

MTD for VAT came into play on 01 April 2019, and companies have been expected to remain compliant since 07 August 2019. This platform is part of the government\u2019s commitment to making tax completely digital and accessible and companies are expected to keep digital records of all their transactions, invoices, payments and more.<\/span><\/p>\n

However, not all companies are created equal. You may want to keep using spreadsheets because their entire operation is in that format and changing it would be too disruptive or expensive. Or you may already be using a certain accounting software or platform to manage your business and the move would be equally disruptive or expensive.<\/span><\/p>\n

This is when you can use bridging software.<\/i><\/strong><\/p>\n

But before we dig deeper into what you need to know about bridging software, let\u2019s look at what you need to know about signing up for MTD and getting your business on the right track.<\/span><\/p>\n