Making Tax Digital (MTD) for VAT: Registration action required and your how to guide

Many businesses will be aware of the MTD requirements for VAT which came into force on 1 April 2019 and may already be using compatible software or be in the process of setting this up. To ensure full MTD compliance we have outlined registration action required with time frames and further details.

As a reminder, VAT registered businesses with a taxable turnover above the VAT threshold (currently £85,000) are now required to use the MTD service to keep records digitally and use software to submit their VAT returns.
 
If you are already submitting VAT returns through software such as Xero, Sage or Quickbooks, or are about to use bridging software, you may think you are already MTD compliant. However, there are a few things you need to do before this is the case.

Firstly, consider when you need to register for MTD. This is determined by your VAT return periods and if you have a direct debit set up for paying HMRC or not. Please see the table below:

First MTD VAT return period MTD VAT return due date Time frame to register for MTD (direct debit payers) Time frame to register for MTD (non-direct debit payers)
Quarterly (1 April 2019 – 30 June 2019) 7 August 2019 15 May 2019 – 23 June 2019 8 May 2019 – 23 June 2019
Quarterly (1 May 2019 – 31 July 2019) 7 September 2019 15 June 2019 – 23 July 2019 8 June 2019 – 23 July 2019
Quarterly (1 June 2019 – 31 August 2019) 7 October 2019 15 July 2019 – 23 August 2019 8 July 2019 – 23 August 2019

You can register earlier than the dates above, and we strongly recommend you make sure you have given yourself plenty of time to complete the whole process before the next VAT return is due, in case you encounter any technical difficulties. Allow at least 24 hours after submitting the last non-MTD VAT return before registering. As the system is new and due to the significant volume of sign ups, we have in some cases seen delays of up to 10 days to complete the registration process.

You may have received a letter through the post from HMRC with details of how to register. If not, please use this link: https://www.gov.uk/guidance/sign-up-for-making-tax-digital-for-vat

When registering, you will need your HMRC login details, VAT number, UTR number for the business and company number (if applicable). Once this has been done, you should receive an email from HMRC within 72 hours confirming you have registered for MTD. Please do not try the next steps or attempt to submit an MTD VAT return until you receive this email. Check your junk mail if it has not appeared in your inbox.
Once you have received this email, ensure your accounting software is set up for MTD. This may be as simple as clicking a button to enable MTD, however additional steps may be required depending on the software used.

If you have a direct debit set up for paying your VAT to HMRC, update your details on the new HMRC portal once you have received the confirmation email. Again, leave plenty of time to update the system as some of our clients have experienced delays and technical difficulties when submitting these changes. Once all of the above is done, you should be ready to submit your first MTD VAT return.

If you are concerned about any of the above or wish to discuss our MTD bridging solution, CoZone, please get in touch.

Mark Pryce

Partner

0141 886 6644 Mark.Pryce@campbelldallas.co.uk