From the 1 April 2019 the majority of VAT-registered businesses with a taxable turnover above the VAT registration threshold (currently £85,000) are required to submit their VAT returns via compatible software and keep their VAT records digitally. Whilst the legislation applies to a large number of businesses some more complex entities have been granted a deferment to October 2019 by HMRC.
It is important to note that HMRC will not automatically enrol qualifying businesses into the new legislation. It is the responsibility of the business owner to enrol into the new legislation at the right time.
In our latest blog we look at when you should enrol and start to submit VAT Returns under the new MTD system and the timing requirements for doing so.
When is the first Making Tax Digital for VAT return quarter?
The legislation applies to the first VAT quarter that starts on or after the 1st April 2019, the table below outlines your first VAT return under the new MTD rules:
Businesses with VAT quarters ending May, August, November and February would be able to submit the VAT quarter to May 2019 under the old rules providing they haven’t already enrolled.
The VAT return for quarter June – August 2019 would need to be submitted under new MTD rules.
When to enrol for MTD for VAT
Timing of enrolment is key, and it is vital that you get this right. Once signed up, HMRC will expect all future VAT returns to be filed through MTD software – including those VAT periods which have not yet been submitted. Businesses should ensure that all non MTD VAT returns have been submitted before enrolling.
HMRC offers the following guidelines as to when you should sign up to MTD for VAT
- If your business pays via direct debit then you cannot sign up in the 5 working days after the submission deadline for the last non MTD VAT Return
- Businesses that pay via direct debit must also sign up at least 7 working days before the first MTD VAT Return is filed
- If you pay by non-direct debit methods, you must allow 24 hours after submitting your last non-MTD return before signing up.
- You will receive an email acknowledgement from HMRC within 72 hours of registering, do not attempt to file the first MTD for VAT Return until this confirmation email has been received.
- If you’ve filed your VAT return late, and you pay by direct debit, you must allow five working days after filing late before signing up. If you pay by non-direct debit methods then, as above, you must allow 24 hours before signing up if you’ve filed your VAT return late.
How we can help
PM+M can offer a wide range of services and support to help you become MTD compliant, including; reviewing your current VAT procedures, guiding you towards a suitable solution, assisting with quarterly submissions to HMRC and even providing training for your team.
If you have any questions in relation to becoming MTD compliant get in touch with our specialist MTD team by emailing MTD@pmm.co.uk or call 01254 679131.