What must all VAT registered businesses continue to do even if their turnover falls below the registration threshold?

The requirement for VAT registered businesses to continue using the Making Tax Digital (MTD) Service is based on the regulatory framework established by HM Revenue and Customs (HMRC). Once a business is VAT registered, it must comply with all VAT obligations, including the submission of VAT returns using the MTD system, regardless of any changes in turnover. This ensures that all businesses maintain a consistent approach to VAT accounting and reporting and helps HMRC to better manage and monitor compliance.

While keeping financial records is essential for all businesses, and certain businesses might need to maintain an inventory list, these do not specifically relate to VAT obligations in the context of this question. Submission of monthly income statements is not a standard requirement for VAT registered businesses; instead, they typically submit quarterly or annual VAT returns. Thus, the focus on the MTD Service as a mandatory compliance mechanism for those businesses indicates that continuing to use this system is critical for VAT registration status.