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Making Tax Digital - for VAT

May 16, 2021

Records you must keep digitally

VAT registered businesses with a taxable turnover of more than £85,000 must follow the rules as set out by HMRC for "Making Tax Digital for VAT" by keeping some records digitally, unless of course;

your business applied for an exemption
your business uses the VAT GIANT service

If your business turns over less than £85,000 you can choose to sign up to Making Tax Digital

The records that you must keep digitally are;

your business name, address and VAT registration number
any VAT accounting scheme 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 that you make to a VAT 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 he sale price and the purchase price of good 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 sals, and the VAT on those sales, if you trade in gold and use the Gold Accounting Scheme

You also need to keep digital copies of documents that cover multiple transactions made on behalf of your business by:

volunteers for charity fundraising
third party business
employees for expenses in petty cash

YOU MUST add all of your transactions to your digital records however you DO NOT at this point in time need to scan paper records like invoices or receipts

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Plans for ID verification from Companies House

by PH186232 • 22 Oct, 2024

Starting in early 2025, Companies House will begin rolling out new identity verification requirements for company directors and persons with significant control (PSCs). This means that, in the future, before filing information on the Companies House register, directors will need to prove their identity. This change is designed to reduce fraud and improve transparency. The reforms are part of the Economic Crime and Corporate Transparency Act 2023, which aims to combat fraudulent activity. As part of these reforms, accountancy firms and solicitors registered for anti-money laundering (AML) supervision will be among the first required to comply, starting in early 2025. By spring 2025, accountants and other professional service providers, who are registered for AML supervision, will be able to become authorised corporate service providers (ACSPs). This means they’ll be able to help clients verify their identities and pass that information on to Companies House. By autumn 2025, these new ID verification requirements will be mandatory for new directors and PSCs when setting up a company or making new appointments. If your business already exists, you will have a 12-month transition period until autumn 2026 to ensure your directors and PSCs comply with these requirements when your next confirmation statement is due. This is a significant change, therefore it’s important to stay ahead of these requirements to avoid any disruptions to your business.