HMRC urging businesses to sign up to MTD before August
HMRC is urging businesses with an annual turnover above £85,000 to sign up to Making Tax Digital before the 7 August VAT filing date.
There are 1.2 million businesses affected by the Making Tax Digital rules that came into force on the 1 April 2019. Many of those will be required to submit their first quarterly VAT return to HMRC using software by the 7 August. For those businesses who pay by Direct Debit, they will need to register by Monday 29 July.
Making Tax Digital has been implemented by HMRC to make it easier for businesses to get their tax right, thus reducing tax lost due to avoidable mistakes. The latest tax gap figures showed that avoidable mistakes had cost taxpayers more than £9.9 billion last year – with £3 billion of that attributable to VAT alone.
How to sign up
Businesses can sign up for Making Tax Digital on the gov.uk website.
If you are paying by Direct Debit, then you are required to register at least 7 working days before a return is due.
For businesses who are not paying by Direct Debit, you can register at least 72 hours (three days) before their return is due.
Make sure you have Making Tax Digital compatible software and that your last Direct Debit has come out of your bank account before signing up.
There is a full step by step guide for businesses about registering for Making Tax Digital on the gov.uk website.
How HMRC are supporting businesses
HMRC recognises that companies will need time to become familiar with the new requirements of Making Tax Digital. Therefore, during the first year of mandation, they will not issue filing or record keeping penalties where businesses are doing their best to comply. However, sanctions will remain possible in cases of deliberate non-compliance, and to safeguard VAT revenue.
No business will be forced to go digital for their VAT returns if they are unable to.
Anyone who is already exempt from online filing of VAT remains so under Making Tax Digital, and there is further provision for those who cannot adapt to the new service due to factors such as age, disability, or location to apply for an exemption.
Those businesses that are registered for VAT but are below the VAT threshold are also not required to use the MTD service. However, you can choose to do so if you wish.
If you found this information useful, you may also want to check out the following:
- Making tax digital: use of supplier statements
- Have you checked your Making Tax Digital for VAT sign up date?
- Tenant Fees Act 2019 – are you compliant?
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