May 20, 2019
HMRC has updated it guidance about when you must start the Making Tax Digital for VAT (MTDfV) registration process to ensure that you aren’t late. How long have you got?
HMRC notice. HMRC has recently added to its guidance notice for all things Making Tax Digital for VAT (MTDfV) to help businesses make the jump to the new system. Separately, it has announced when you must sign up for MTD and how long it will take. In fact, there are several dates being bandied about in connection with MTDfV which might cause confusion.
Record Keeping. Unless you’re exempt from MTDfV you must keep compatible records from the start of your first VAT return period which begins on or after 1 April 2019, unless HMRC has told you your MTD start date has been delayed. If you become liable to register for VAT after 1 April 2019, MTD record keeping beings from the date of registration.
Signing up for MTD. The start date for keeping MTDfV compatible records is different from the date you must sign up with HMRC. If you’re VAT registered you can sign up as soon as you like, but as HMRC says it will take up to seven days to process your registration you should do it at least that length of time before you are due to submit your first MTD return. For example, if you first MTD return must be submitted by 31 July 2019, go online and sign up by no later than 24 July.
Direct debit confusion. If your business pays its VAT bills by direct debit you get an extra seven days to submit your VAT return. A return that would otherwise be due on 31 July can be submitted as late as 7 August. However, there are special rules for signing up for MTDfV. You cannot sign up in the seven working days leading up to or the five working days after sending a VAT return. Our advice is to sign up as soon after the date you need to start keeping MTDfV-compatible records. If there are any problems with the process this will give you time to sort them out.