Should I have signed up at 1 April 2019?
Even though Making Tax Digital (MTD) start date is 1 April 2019, it is essential that you ensure you have filed your last vat return on the old HMRC system BEFORE you sign up for MTD.
For example, for QE 31 March 2019 VAT return, the submission deadline was 7 May 2019. So, if you file the last return under the old system in early May, we recommend the best time would be mid-May before you want to register for MTD for VAT.
| First VAT Quarter | Keep digital records from | Filing Deadline
(manual payments) |
Filing Deadline
(If setting up new DD) |
| QE 30 June 2019 | 1 April 2019 | 7 August | 31 July |
| QE 31 July 2019 | 1 May 2019 | 7 September | 31 August |
| QE 31 August 2019 | 1 June 2019 | 7 October | 30 November |
Can I sign up anytime?
If you pay via DD, no! You will need to ensure HMRC has enough time to transfer the direct debit over to the new MTD system.
HMRC’s recommendation is not to sign-up within five working days after submission of a return is due, and at least seven working days before the next return is due.
Will HMRC sign me up automatically?
All businesses affected by Making Tax Digital have to either sign up themselves, or have an agent sign up for them on their behalf.
This is not automatic and HMRC are not signing businesses up.
How do I calculate the turnover threshold?
The first turnover test is the 12 months to 1 April 2019, if taxable turnover is over £85,000 then you must register.
If you are close you will need to monitor this each quarter, should you go over then the quarter afterwards you will need to register for MTD, following the sign-up guidelines.
Can I de-register from MTD?
Once you are in under Making Tax Digital, you cannot de-register from MTD even if your threshold subsequently drops below the £85,000 limit.
The only way, is to de-register from VAT completely.
Deferred or exempt – You don’t need to apply
Exempt – You don’t need to apply for Making Tax Digital if you are already exempt from filing VAT returns online.
Deferral is different. HMRC has written to all the business it considers as deferred. This means your start date has been delayed, but it will still apply.
The deferral criteria, entering MTD from the delayed date 1 October 2019 include:
- a local authority
- a public corporation
- part of a VAT group / VAT Division
- submit annual returns
- based overseas
- a trust
- a not for profit organisation which is not set up as a company
- make payments on account
Is bridging software a temporary arrangement?
There is no set end date for the use of spreadsheets or bridging software within the MTD for VAT initiative, therefore this is not deemed as a temporary arrangement.
They recognise that for some businesses, extracting data from other software products to submit the returns will be the simplest way to comply with the new requirements.
Any business using spreadsheets must ensure they meet all the MTD requirements, and file using an approved bridging software.
Author: Emma Hardwick, Plus Advisory Manager, Plus Accounting
Any views or opinions represented in this blog are personal, belong solely to the blog owner and do not represent those of Plus Accounting. All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.