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Do you file monthly or quarterly VAT accounts? HMRC has confirmed that from 1 November 2022, VAT-registered businesses will no longer be able to use their VAT online account to file quarterly and monthly VAT returns. The move has been presented by HMRC as “business as usual” but for those non MTD-compliant businesses under the VAT threshold, it may be something of a shock, and they will need to act quickly to ensure they are ready to abide by the MTD regulations.
The only exception to this directive will be digitally excluded businesses, who can continue to use HMRC’s online VAT account. You will be able to apply for an exemption from using Making Tax Digital for VAT if you consider that you are digitally excluded. You can apply if:
- it’s not practical for you to use software to keep digital records or submit them — this may be due to your age, disability, location or another reason
- you are a practising member of a religious society (or order) whose beliefs are incompatible with using electronic communications or keeping electronic records
The closure of HMRC’s online account on 1 November will mean that businesses who currently file on a monthly or quarterly basis have no other option but to use MTD-compatible software and to keep their VAT records. It also means that voluntary VAT-registered businesses that only joined MTD VAT from April 2022 now have only a few months to comply with MTD.
Although the HMRC VAT online portal will no longer be usable from Tuesday 1 November 2022, businesses that file annual returns can still use this route until 15 May 2023.
Businesses that haven’t yet signed up to MTD VAT are being instructed to first choose MTD-compatible software, enable it to work with MTD, and then sign up for MTD and start filing their returns after 1 November. If you need any help or advice please contact us to get started.
MTD for Income Tax Self Assessment
HMRC have just updated their guidance on MTD for Income Tax Self Assessment, and it is worth making a note of the key requirements which need to be in place by 6 April 2024
- You need to submit your Self Assessment tax return for 2022 to 2023 by 31 January 2024
- HMRC will review your return and check if your qualifying income is more than £10,000
- If it is, they will write to you and confirm that you must meet the Making Tax Digital for Income Tax requirements by 6 April 2024. If you have an agent, they can meet the requirements on your behalf
- You or your agent (such as Scrutton Bland) must find software that’s compatible with Making Tax Digital for Income Tax and authorise it.
- You or your agent (such as Scrutton Bland) must sign up for Making Tax Digital for Income Tax.
If you are confused about how MTD will work for your business, or need help setting up compliant digital systems, then get in touch with the Scrutton Bland team. Our MTD experts will quickly be able to identify all the options available to you and get your business ready for MTD ITSA.
With friendly advice from the SB Digital team, you’ll learn how you would benefit from upgrading your existing software, whether you could use bridging software to link to HMRC or if you need to introduce new systems. And they can even apply to HMRC for an extension if your circumstances merit it.
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