How to register for Making Tax Digital for VAT

Did you know the way you file your VAT Returns for your VAT-registered merchantry has changed?

By law, you need to sign up to Making Tax Digital (MTD) and are required to use MTD-compatible software for keeping VAT records and filing VAT Returns.

And with VAT Return filing deadlines on the horizon, you need to make sure you’re complying with all requirements.

After all, you don’t want to end up with a potential fine for not pursuit the rules, right?

Plus, from 1 November 2022, you can’t use your existing VAT online account to file quarterly or monthly VAT Returns (there is a caveat on this, more details on that below…).

Is this all news to you?

Don’t despair, we’re here to help you with Making Tax Digital for VAT.

In this article, we squint at how to register for MTD for VAT if you’re new to it all.

Here’s what we cover:

• Overview of Making Tax Digital for VAT
• Can I simply siphon on submitting my VAT Returns as normal?
• How to register for a VAT worth and submit a VAT Return online
• What you need to register for MTD for VAT
• How to register for MTD for VAT
• Can my purser register for MTD for VAT for me?
• How to ask to be digitally exempt from MTD for VAT
• Can I deregister from VAT to stave MTD for VAT?
• Final thoughts on MTD for VAT

Overview of Making Tax Digital for VAT

If your merchantry is registered for VAT, you’ve probably heard all well-nigh Making Tax Digital (MTD), and MTD for VAT in particular.

Introduced in April 2019, it unauthentic all VAT-registered businesses over the VAT threshold (currently £85,000).

But now, MTD for VAT applies to all VAT-registered businesses. This includes businesses that are voluntarily registered for VAT and under the threshold.

They must store their VAT written records digitally and use uniform software for their VAT accounting.

MTD for VAT provides an opportunity to revolutionise your accounting.

By switching to software, or updating your current software to be compliant, you can both modernise and take wholesomeness of the latest technologies.

At the same time, your overall written admin workload is reduced.

Can I simply siphon on submitting my VAT Returns as normal?

Unfortunately not, no.

From 1 November 2022, you won’t be worldly-wise to use your existing VAT online account to file quarterly or monthly VAT Returns.

(If you file yearly VAT Returns, HMRC says you can use your VAT online worth until 15 May 2023.)

The only way you’ll be worldly-wise to submit your VAT Returns is by signing up to MTD for VAT and using MTD uniform software – and you need to start doing that now or you could be penalised by HMRC.

However, if your merchantry turnover is under the £85,000 VAT threshold and you’ve not signed up for MTD for VAT in unbearable time to submit your next tax return by 7 November 2022, you’ll still be worldly-wise to use your existing VAT online account.

Take note – it will only be for that return.

Following that, for quarterly or monthly VAT returns, you’ll need to use MTD-compatible software to file any that are due without 1 December 2022.

If you don’t, you could squatter a penalty.

HMRC is sending reports and emails to businesses now that need to start pursuit the MTD for VAT rules, so if you’ve not signed up your VAT registered merchantry for Making Tax Digital yet, you’ll likely receive one.

And rather than waiting, it’s weightier to make the transpiration to your processes now. That starts with registering for MTD for VAT.

More details on that below…

How to register for a VAT worth and submit a VAT Return online

If the taxable turnover of your merchantry is under the VAT threshold and you’ve not once registered voluntarily for VAT, now might be the time.

Registering ways you can reuse VAT on things you purchase for your business.

Many businesses register voluntarily considering it makes their operation towards increasingly professional – expressly when selling to other businesses.

The goal of Making Tax Digital for VAT is to simplify VAT accounting. So if you’ve been put off previously by the admin requirements of VAT accounting, it’s a unconfined opportunity.

You can register for VAT online, or your purser can do it for you. If doing it yourself, you’ll need to create a Government Gateway worth for your merchantry (if you don’t once have one).

Once you’ve registered for VAT, you’ll be sent your VAT number that you should then quote on your VAT invoices.

You should start written for VAT from the stage that HMRC registers you.

Once you have your VAT number, you can moreover submit a VAT Return online when the time comes.

You can use accounting software to submit your VAT Return to HMRC.

What you need to register for MTD for VAT

To register for MTD for VAT, you’ll need gather together a few shit of information:

• The email write you use for your business
• The Government Gateway ID you use for the business
• Your VAT registration number
• Your latest VAT Return
• Your National Insurance number if you’re a sole trader
• Your visitor registration number and Unique Taxpayer Reference (UTR) if registering a limited company.

How to register for MTD for VAT

You need to segregate the software you intend to use surpassing signing up for MTD for VAT.

You can register for MTD for VAT by clicking register for MTD at the Gov.uk website, then wordplay the questions, which will involve providing the information mentioned earlier.

There are limitations on when you can sign up – this stops you unwittingly making a double payment for your current return.

You should not sign up less than seven days surpassing your VAT Return is due, or less than five days without your VAT Return is due.

You should receive confirmation from HMRC within three days.

The MTD for VAT features in your written software need to be zingy once you know your sign up details, as provided by HMRC.

Therefore, vivification won’t be automatic. Speak to your software vendor if you’re unsure of what’s required.

Can my purser register for MTD for VAT for me?

Yes. Just ask them to do so on your behalf.

But withstand in mind that this doesn’t midpoint you can ignore MTD for VAT’s requirements.

You still need to store your key VAT written records digitally and use software for your VAT written – plane if your purser then calculates your VAT snout and submits the VAT Return on your behalf.

Your purser may ask that you link your written software with theirs.

How to ask to be digitally exempt from MTD for VAT

It’s not possible to opt out of MTD for VAT.

However, some businesses have genuine reasons why they’re unable to comply with Making Tax Digital.

These include the following:

• Reasons of age, disability, remoteness of location or, in HMRC’s words, “any other reason” that ways it’s not “reasonably practicable” for the merchantry owner to use digital tools to alimony merchantry records or submit returns. For example, a merchantry without an internet connection considering it’s on an island that’s off the grid might be considered exempt.
• Religious beliefs are incompatible with the requirements of MTD for VAT. This is typically that the individuals running the merchantry are unable to use computers considering of their beliefs.

To wield for exemption, undeniability HMRC’s VAT helpline to discuss the situation and unify volitional measures.

It’s important to note that if HMRC believes exemption isn’t appropriate, it may offer digital assistance to help your merchantry get online support.

Can I deregister from VAT to stave MTD for VAT?

Any VAT-registered merchantry can ask to cancel their VAT registration with HMRC if they’re not eligible anymore or if taxable sales waif unelevated the £83,000 deregistration threshold.

VAT registration can be cancelled online, or you can you fill in and then post a VAT7 form to HMRC.

HMRC says it takes three weeks for the receipt to be confirmed.

This will include confirmation of the receipt date, which you will once have set with HMRC. Typically, this is the stage on which you make the request.

Up to that date, you should protract to observe VAT requirements.

You’ll need to submit a final VAT Return for the period up to the receipt date.

This must worth for stock and resources you have at the receipt stage if you could reuse VAT when you bought them, and if the total VAT due is over £1,000.

Final thoughts on MTD for VAT

Now you know how to register for Making Tax Digital for VAT, you can take the steps to do so for your business.

And by using software to manage your VAT accounting, you’ll be worldly-wise to revolutionise your processes.

Need increasingly help with MTD for VAT?

Speak to your purser well-nigh the requirements – they can help you examine processes in your merchantry to see what needs to be adapted.

Editor’s note: This vendible was first published in September 2021 and has been updated for relevance.

The post How to register for Making Tax Digital for VAT appeared first on Sage Advice United Kingdom.