HMRC’s VAT return portal closes soon. Businesses not using Making Tax Digital for VAT (MTDfV) by then won’t be able to submit their returns and so risk penalties. What’s the full story?
HMRC warning
In early October 2022 HMRC released figures showing that around 100,000 VAT-registered businesses are heading towards a cliff edge. VAT online accounts currently allows businesses to submit their VAT returns but this service won’t be available after the end of October. This means that from 1 November 2022 the only way to submit your VAT returns will be to register and use Making Tax Digital for VAT (MTDfV) (see The next step ).
Trap. Not only will you not be able to submit returns, for which you can be fined if you’re required to use MTDfV, but there can be further penalties simply for not following the rules. Tip. Some businesses may be allowed to submit their VAT returns by post on a paper version of the form. However, the circumstances where this relaxation can be used are very limited (see The next step ).
MTDfV requirements
There’s anecdotal evidence to suggest that some businesses are complying with the other requirements of MTDfV, i.e. they are keeping their business records digitally in an approved format but have continued to submit their VAT returns via their HMRC online VAT account. If that’s you, the switch to MTDfV will be relatively simple; go to HMRC’s MTDfV registration page and sign up without delay (see The next step ). Once that’s done use the VAT return function in your bookkeeping software to submit your returns.
Tip. If you use spreadsheets instead of bookkeeping software, use one of the numerous bridging apps to link your records to HMRC’s MTDfV system (see The next step ). Tip. If you’re unsure about what you need to do for MTDfV don’t bury your head in the sand. We recommend you discuss it with your accountant or watch HMRC’s webinars on the subject (see The next step ).
If you’re VAT registered you must use MTDfV to submit your returns from 1 November 2022 or face penalties. If you’re unsure about how to proceed ask an accountant or refer to HMRC’s webinars.
The next step
Approved software
The MTDfV registration site
HMRC’s webinars
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.