The first quarterly returns to be submitted to HMRC under the Making Tax Digital regime will be for the quarter ended 30 June 2019. Now is the time to make sure you are fully signed up and your software is activated ready for the submission which will be due by the 7 August 2019. Our article on 31 May 2019 detailed the steps you need to take to make sure you are MTD ready, but here is a quick recap.
Firstly, do the MTD rules apply to you?
If you are VAT registered and your turnover in the last twelve months is over £85,000 then you will need to submit your VAT returns to HMRC using MTD compliant software. You will not be able to submit your returns through the HMRC website anymore. If your turnover is below £85,000 you can continue to submit your returns in the usual way.
Have you registered for MTD with HMRC?
Before you can submit your first MTD compliant VAT return with HMRC you need to have signed up for this service with them. If you haven’t already done so, please visit https://www.gov.uk/guidance/sign-up-for-making-tax-digital-for-vat to complete this process. You will need to fill in some details about your business including the VAT registration number and how you would like HMRC to contact you in relation to MTD and, if you have a Direct Debit set up, how you would like them to contact you with Direct Debit confirmation emails. Once this process has been completed, you should receive an email from HMRC within 72 hours to confirm you have activated MTD.
Paying VAT liabilities by Direct Debit, then when should you sign up for MTD?
If you currently pay your VAT liabilities by Direct Debit you cannot sign up for MTD in the seven days leading up to when your VAT return is due. You also cannot sign up in the five days after your VAT return is due. If you are signing up for MTD close to the VAT return deadline, you may need to contact HMRC or your bank provider to make sure your Direct Debit payment will still be taken. If it will not go through, you will need to arrange payment by electronic methods instead.
Registered for MTD with HMRC, what next?
Once you have received your confirmation email from HMRC, you will then need to activate MTD in your software. Each different type of software has its own procedure for this; take a look at the videos and helpsheets from the software supplier for guidance on this.
Not signed up to software yet, what should you do?
For the first twelve months of the MTD regime, you can continue to use your spreadsheets to prepare your VAT returns and then use “Bridging Software” to submit your returns. If you would like further information regarding “Bridging Software” or MTD compliant software that may be suitable for your business, please contact us. Whatever you do, you must take action now to make sure you are compliant. Allowing yourself enough time to follow and complete all of the above steps.
June 21st, 2019
