Making Tax Digital for VAT took effect on 1 April 2019, but only 17% of businesses required to submit digital returns had enrolled by this date. How much time do you have to enrol if you haven’t done so already?
VAT periods. The first quarterly VAT period that is mandated for Making Tax Digital for VAT (MTDfV) began on 1 April 2019, so the earliest possible filing date is 1 July 2019. This means that your business still has plenty of time to enrol for MTDfV before a return is due. The issue is more urgent if your business submits monthly VAT returns but the April return still does not need to be filed until 7 June.
Tip. A separate requirement of MTDfV is to keep digital accounting records, e.g. spreadsheets or a full accounting package. But you don’t need to keep these records in real time so there is no problem if you post a full quarter’s records just before you submit your return.
Trap. Don’t forget that if you complete your records with spreadsheets, you must obtain bridging software to link the spreadsheet totals with the VAT return submission process.
Registering. You need to allow time before your return is due to register for MTDfV, by logging onto your tax account with HMRC and going through the registration process. Alternatively, you could ask your agent to submit your returns through their Agent Services Account. HMRC suggests you allow a week before any deadline date to complete the registration process.
Tip. When you register for MTDfV, you will need to provide an e-mail address. It is important that you choose an address which you regularly check in case you receive any urgent e-mails from HMRC.
Deferred businesses. About 3.5% of VAT-registered businesses will not need to comply with MTDfV until VAT periods beginning on or after 1 October 2019. These businesses include trusts and not-for-profit organisations that are not set up as a company; VAT divisions and groups; those required to make payments on account; annual accounting scheme users; many public sector bodies; traders based overseas.