Making Tax Digital for VAT

Making Tax Digital (MTD) for VAT

Our most frequently asked questions to help you submit by Wednesday 7 August 2019

Robert Marchant, Partner, VAT
23/07/2019
Making Tax Digital for VAT

Do I fall under the new MTD rules?

For a large number of organisations the answer will be yes, unless you are eligible for the deferral or are voluntarily registered for VAT. If this is the case HMRC will have written to you to confirm if you are deferred or exempt from the new rules. Therefore, you should prepare now for the MTD rules if you have not received a letter.

What do I need to do?

You will need to submit your VAT return digitally using MTD compatible software before the deadline of Wednesday 7 August 2019 if your latest VAT return period ended on Sunday 30 June 2019. Before you can do this, you will need to sign up for the new Digital Services Account (DSA) in order to activate your MTD account. This can take up to three days for HMRC to approve, so do not delay in setting this up.

We are offering an MTD set-up service if you need any assistance in signing up for the new account. Please contact us for more information.

My DSA is set up, can I submit?

You will need to confirm that you have MTD compatible software in place during the DSA set up. HMRC has collated a list of MTD approved suppliers. We recommend that you set up software now, and identify and resolve any potential issues before you are required to submit.

Once the DSA has been activated, you will need to link it to your MTD software, whether this be your own accounts system or third party bridging programs.

We can assist with the digital submission of your VAT return if you do not have your MTD bridging software in place or are not sure which provider to use. Please contact us for more information.

Is there anything else I should be aware of?

  • We recommend signing up to the DSA as soon as possible to avoid potential delays. We expect that HMRC as well as software supplier helplines will be extremely busy around this time as organisations encounter issues.
  • Under the DSA, you cannot print off your VAT registration certificate, so we recommend taking a copy from your current VAT account on the Government Gateway before signing up for MTD.
  • There is the risk that your existing direct debit may not carry over to the DSA and a new one will need to be set up. HMRC recommends signing up for the DSA at least seven working days before the submission deadline to ensure the direct debit is set up in time. Further guidance on this can be seen in our previous article.
  • If your organisation does not have a Unique Taxpayer Reference (UTR) for direct taxes (i.e. Corporation Tax, Income Tax etc) then you will not be able to sign up for MTD. Contact HMRC or your tax advisor on what to do if you do not have a UTR.
  • Currently, HMRC only require that the nine boxes of the VAT return are submitted digitally. The requirement for digital links does not start until next year.
  • Some spreadsheet based bridging software may be blocked from download by your firewall, depending on your settings, so an alternative solution may be necessary. Again, you should allow additional time to get everything in place.
  • Some MTD software is set up for the most up to date versions of underlying software (such as Excel or Windows) so allow additional time if using older versions.

How we can help 

Contact us

Robert Warne
Robert Warne
Partner, Head of VAT
London
Robert Marchant
Robert Marchant
Partner, VAT
London
Keri Pay
Keri Pay
Partner, VAT
Midlands/Manchester