Date
28 Sep 2022Category
Tax, VAT & Indirect TaxThe way to file monthly or quarterly VAT returns is changing.
HMRC’s online VAT filing account is closing for businesses who submit monthly or quarterly VAT returns. From 1 November 2022, all VAT registered businesses need to submit their monthly or quarterly VAT returns using Making Tax Digital (MTD) compatible software. Businesses that file annual VAT returns can continue using the online filing account until 15 May 2023.
It is estimated that 10% of VAT registered businesses above the VAT threshold and 55% of VAT registered businesses below the threshold have not yet signed up for MTD for VAT.
What this means for VAT registered businesses
Closing the online account means that businesses must submit their monthly or quarterly VAT returns using MTD compatible software. This includes those voluntarily VAT registered businesses who meet the recent MTD criteria from 1 April 2022 to maintain digital VAT records with HMRC via compatible software.
Businesses who have an MTD exemption under the digitally excluded business exemption will not be required to use MTD compatible software.
What to do if you are impacted
If you are a business owner and currently filing monthly or quarterly VAT returns using the current online VAT filing account, then you need to register for MTD (if not already registered) and start using MTD compliant software to file your VAT returns. Businesses who do not comply risk facing a financial penalty.
These changes take effect from 1 November 2022 therefore we recommend taking action early to prevent any issues or surprises when it is time to file in the new format.
How we can help
We have a strategic partnership with Xero, cloud accounting software, offering a solution to MTD compliance, as well as many other benefits. We can tailor an MTD solution to fit the needs of you and your business. Our Digital Delivery team are experts in supporting businesses move to cloud accounting and MTD compliant software.
Our experts have created a 'Making Tax Digital' guide, taking you step-by-step through the process to ensure you remain compliant. Download the guide here.
If you would like more information on MTD for VAT and solutions, or need assistance with MTD compliance, please speak to a member of our specialist team or contact your usual Azets advisor.
