If you’re VAT registered you must now use MTDfV to submit your returns from November 2022 or face penalties.
Businesses not using Making Tax Digital for VAT (MTDfV) can no longer submit their returns via HMRC’s VAT return portal and risk penalties.So 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 ceased at the end of October.
This means that the only way to submit your VAT returns is to register and use Making Tax Digital for VAT (MTDfV)
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.
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.
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.
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.
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