HMRC has announced that it will now be signing up all remaining businesses to Making Tax Digital for VAT automatically, unless they are exempt or have applied for exemption.

Since 1 April 2022, compliance with Making Tax Digital (MTD) for VAT has been mandatory for all remaining VAT registered businesses, primarily those under the VAT threshold of £85k, except the few which have been granted an exemption.

Following HMRC’s latest announcement, businesses can now no longer sign themselves up for MTD for VAT, and agents no longer need to sign up their clients.

What does this mean for businesses?

Although most businesses will already be signed up and using compliant software, all remaining VAT registered businesses will be signed up automatically, unless they have an exemption (or are awaiting a decision).

Businesses must now keep digital records and ensure they make the transition in time to file their VAT return through the MTD Government Gateway using compatible software. The existing (non-MTD) Government Gateway will be unavailable at the point of sign up.

This could potentially lead to some businesses facing penalties for late filing.  It is important to note that even where a business is unable to file their return, they must still pay their VAT liability on time to avoid interest charges or further penalties.

What do I need to do?

If you are required to be signed up for MTD for VAT and are not already compliant, you should begin keeping your records digitally immediately and implement an appropriate software solution.

Our Digital Advisory team can provide guidance on your MTD obligations as well as advising on the best software solution for your business. To discuss your requirements, get in touch with me at ewan.bolt@jcca.co.uk or another member of our Digital Advisory team.