Landlords who submit tax returns via VAT-registered companies have until April 1 to sign up to the HMRC’s Making Tax Digital initiative.
So far around a third of VAT-registered businesses with taxable turnover below £85,000 have enlisted, amounting to 1.6 million taxpayers.
Making Tax Digital for VAT forms part of the HMRC’s push to digitalise UK tax payments.
Joanna Rowland, HMRC’s director general for transformation, said: “Making Tax Digital is fundamental to the delivery of a trusted and modern tax system, making it easier for businesses to get their tax right and supporting the UK to go digital.
“By signing up for Making Tax Digital, we expect most businesses to experience long-term benefits, including reduced errors and time saved in managing their tax affairs.
“We encourage businesses to explore digital record-keeping for their VAT affairs and use this time to choose the right software to support their business needs.”
In July 2020 it was announced that all VAT-registered businesses must file digitally through Making Tax Digital from April 2022, regardless of turnover.
To sign up for Making Tax Digital VAT, businesses need to visit gov.uk and choose compatible software; keep digital records starting from 1 April 2022 or the beginning of their VAT period; and sign up and submit their VAT return through the new system.
There are over 500 software programs certified by HMRC as compatible, including 22 that offer a free option.
The department is also hosting a series of webinars to help small business owners get up to speed with the change.
Mike Cherry, chair of the Federation of Small Businesses, said: “We’ll continue to work with government, and through our support services, to minimise the admin and cost impacts of Making Tax Digital on small firms whilst unlocking the productivity gains the initiative could bring.”