VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are now required to use the Making Tax Digital (MTD) service to keep records digitally and use software to submit their VAT returns for periods that started on or after 1 April 2019.
If your business is below the VAT threshold, it is still possible to voluntarily join the Making Tax Digital service now. It should be noted that many software providers will now only allow VAT submissions direct to HMRC if the business is MTD registered.
VAT-registered businesses, with a taxable turnover below £85,000, will be required to follow Making Tax Digital rules for their first return starting on or after April 2022.
Download our factsheet within the publications section below for further details on making the move to Making Tax Digital.
1. Get the right software
Before you sign up, you must have software that:
- Lets you submit VAT Returns; and
- Is compatible with Making Tax Digital for VAT.
2. Sign up for Making Tax Digital for VAT with HMRC
If paying by direct debit, HMRC recommend registering for MTD for VAT at least 5 working days after the last non-MTD submission and at least 7 working days before the first MTD submission.
If the submission is not by direct debit, sign-up must be at least 72 hours before the first MTD submission
You will need:
- Your Government Gateway user ID and password; and
- The VAT number of the business that is signing up.
You will receive an email within 72 hours to confirm that you can submit returns using software that’s compatible with Making Tax Digital for VAT.
Do not submit a VAT Return until you receive the confirmation email.
You must send your VAT Return using compatible software.
You can still view your next VAT Return deadline in your Business Tax Account.
After you have signed up, you cannot use the old VAT online services to send VAT Returns.
3. Authorise your software
Before you can send VAT returns, you will need to authorise your software.
Download our factsheets below for the ‘final steps’ to take within QuickBooks, Sage and Xero.