HM Revenue and Customs is alerting businesses to the fact that the grace period for its Making Tax Digital filing is coming to an end, and from Tuesday 1 November, you will no longer be able to use the existing Value Added Tax (VAT) online account to submit VAT returns.
It is law for all VAT-registered businesses to sign up to Making Tax Digital (MTD) and use compatible software to keep VAT records in order and file returns. The aim of MTD is to help businesses get the process of submitting tax correct in the first instance by reducing errors. This is done by simplifying the process via digital alternatives, and in turn helping businesses grow.
Registering via this online service not only means a faster VAT registration and improved security, but also helps new businesses to be fully compliant with MTD requirements from Day 1. If you are a business owner and haven’t already signed up to MTD, or started using compatible software, follow these steps now:
- Choose MTD-compatible software (or see point 5)
- Check the permissions in the software – once a business has allowed it to work with MTD, they can file VAT returns easily.
- Keep digital records for current and future VAT returns – a business can find out what records need to be kept on GOV.UK.
- Sign up for MTD for VAT and file future VAT returns using MTD-compatible software.
- If you do not use software and keep spreadsheets or manual records, please get in touch and we can discuss bridging options.
There are also other important aspects of Making Tax Digital for VAT to consider:
- Some businesses are exempt from filing VAT returns online. This can be checked on GOV.UK and an application for exemption can be made.
- New businesses that are not yet registered for VAT will automatically be signed up for MTD when registering via HMRC’s new VAT Registration Service (VRS).
For full details on how Lee Coombes Accountancy can help, please click here. We specialise in a range of accounting services including tax advising service, for both limited companies and sole traders.