VAT registered business owners may have received a letter from HMRC titled ‘We are modernising the VAT system – get your business ready now’ which asks you to register for Making Tax Digital.
This instruction needs to be taken with some WARNINGS:
• Once signed up to Making Tax Digital it will not be possible to file any returns through the Government Gateway/via the non-MTD VAT return submission button contained within existing software.
• The timing of the signup is critical and should not be made too early
• If signed up to MTD before the due time then there are 2 options
1. The organisation is signed up to the Making Tax Digital pilot and must fully comply with all Making Tax Digital record keeping requirements with immediate effect
2. Returns which are submitted in the old (non-MTD) format will not be processed and will end up in a ‘black hole’
• Our advice - do not sign up to MTD until the last non-MTD return has been submitted
To sign up successfully:
• The application to register for MTD must be made after all non-MTD VAT returns have been filed
• If VAT is normally paid by Direct Debit do not sign up
- Within 15 days before the new MTD submission deadline
- Within 5 working days after a submission deadline
- It will take up to 72 hours for confirmation to be issued
- No filing should take place whilst the confirmation is pending.
This is likely to change especially for those filing monthly where there would otherwise be a 2 day window.
Summary Table for suggested signup timing
|Quarter end dates||Last non-MTD submission covers period ended||Last non-MTD return submission deadline||Signup to MTD between||First MTD return submission deadline|
|31 March 30 June 30 September 31 December||31 March 2019||7 May 2019||15 May 2019 and 16 July 2019||7 August 2019|
|30 April 31 July 31 October 31 January||30 April 2019||7 June 2019||17 June 2019 and 16 August 2019||7 September 2019|
|28 February 31 May 31 August 30 November||31 May 2019||7 July 2019||15 July 2019 and 15 September 2019||7 October 2019|
For monthly VAT submissions there will be some relaxation and we await further guidance.