Final warning to use MTD for VAT

Posted on 11th October 2022 by Streets Value Added Tax


Image to represent Final warning to use MTD for VAT

The Making Tax Digital (MTD) for VAT regime started in April 2019 when businesses with a turnover above the VAT threshold of £85,000 became mandated to keep their records digitally and provide their VAT return information to HMRC using MTD compatible software.

In April 2022, MTD for VAT was extended to all VAT registered businesses with turnover below the VAT threshold of £85,000. Many businesses with turnover below the VAT threshold had already voluntarily chosen to use MTD for VAT.

More than 1.8 million businesses are using MTD for VAT and more than 19 million returns have been successfully submitted through MTD-compatible software since MTD for VAT was launched.

However, there remains many businesses that continue to use their existing Value Added Tax (VAT) online account to submit VAT returns. The option to submit VAT returns in this way will be closed on 1 November 2022.

This means that businesses who file their VAT returns on a quarterly and monthly basis will no longer be able to use the service from 1 November 2022. There are very limited exemptions available for businesses where HMRC has agreed they are exempt from MTD, for example, people who object to using computers on religious grounds.

HMRC lists the following steps that businesses who are not using MTD for VAT should action as a matter of urgency:

  1. Choose MTD-compatible software – a list of software, including free and low-cost options, can be found on GOV.UK.
  2. Check the permissions in the software – once a business has allowed it to work with MTD, they can file VAT returns easily. Go to GOV.UK to learn how to do this and search ‘manage permissions for tax software’.
  3. Keep digital records for current and future VAT returns – a business can find out what records need to be kept on GOV.UK.
  4. Sign up for MTD and file future VAT returns using MTD-compatible software – to find out how to do this, go to GOV.UK and search ‘record VAT’.

We would of course be happy to help you meet the necessary requirements. If you need any assistance, please do not hesitate to be in touch.


No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.

Information

The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.


Expert insight and news straight
to your inbox

Related Articles


VAT recovery from car leasing payments

The VAT treatment of motor expenses is an important concern for any business that incurs VAT on these costs. Below, we highlight key points to consider regarding the recovery of input tax (VAT) when leasing vehicles. We have covered below some


Construction industry - VAT reverse charge

There are special VAT reverse charge rules in place for certain building contractors and sub-contractors. These regulations, which came into effect on 1 March 2021, make the supply of most construction services between construction or building


When you must register for VAT

The taxable turnover threshold for VAT registration is currently £90,000 and has applied since April 2024. Businesses must register for VAT if they meet one of the following conditions: At the end of any month, the value of taxable supplies made

You might also be interested in...