Newsletter issue - February 2019.
The Making Tax Digital (MTD) pilot has been opened up to all businesses that will be mandated from April 2019 (i.e., the first VAT accounting period starting on or after 1 April 2019) to use compatible software to submit information directly to HMRC.
The pilot was opened at the end of 2018 to partnerships and VAT Flat Rate Scheme (FRS) users, and the following entities are now also able to join:
- EU traders
- businesses who file monthly VAT returns
- businesses that use non-standard VAT accounting periods
- businesses that are not up-to-date with their VAT returns
- newly registered businesses who have not previously used their VAT online account to submit a return
- groups (group can now join the MTD for VAT pilot although the mandatory start date for group registrations is 1 October 2019).
Interestingly, HMRC have noted that, as at 10 January 2019, more than 3,500 businesses had joined the pilot. However, the number of businesses that will be required to join from April 2019 is approximately 1.1m, meaning there is still plenty to be done before the final 'go live' date.
The deadline mandatory filing under MTD will be different for many businesses, depending on when they file their VAT returns. Businesses (or their agent on their behalf) need to be using MTD for VAT:
- Only after they have filed all their non-MTD VAT returns (which may not be until 7 August, 7 September or 7 October 2019 for quarterly filers).
- Only when they have acquired an MTD compatible software product
- If they pay by direct debit, not within the 15 working days before the submission date and the five working days immediately after it.
This can give quite a short timeframe, particularly for businesses that file monthly returns.
The ICAEW Tax Faculty has received reports of unexpected rejections of applications to sign up for the pilot, but this is expected to improve following the relaxation of the eligibility criteria. Any business or agent that encounters a problem during the sign up process is advised to use the 'Get help with this page' link on the relevant screen. This will raise a ticket with HMRC's helpdesk who will get in touch to resolve the issue (i.e., it is a way to get specific help rather than just a way of raising a general issue with a gov.uk page).
For further information, see Making Tax Digital: how VAT businesses and other VAT entities can get ready