If your business has a turnover of over £85,000, you will already have signed up for Making Tax Digital for VAT. However, if your business is VAT registered and has a lower turnover, you need to sign up for MTD for VAT now, if you haven’t already done so. Failure to do so can land you with some hefty penalties.

If you’re in this position, we can help. But you’ll need to act fast. This post explains what you need to do next.

MTD for VAT deadline

All VAT registered businesses are required to use MTD for VAT to submit their first return on or after 1st April 2022. That’s two days away at the time of writing. However, some businesses won’t need to file their first digital return until the summer. Either way, time is not on your side!

Back in December 2021, we published a blog that explains what MTD for VAT is, and what you need to do. In brief, MTD for VAT means you will need to move to system of digital VAT records and returns. To do this, you will need MTD compatible software. You can’t sign up for MTD for VAT unless you have this in place.

What happens if I miss the MTD for VAT deadline?

If you file a VAT return that is not submitted via MTD-compliant software, then you face penalties. According to ACCA, these currently range between £100 and £400, depending on your turnover.

How do I register?

The first thing you need to do is to choose MTD-compliant software. HMRC publishes a list of compatible software here. At THP we recommend Xero for larger businesses and FreeAgent for smaller firms, contractors and freelancers. We also recommend specialised software for buy-to-let landlords, which makes managing a property portfolio much simpler. If you’d like help choosing the right package or getting up and running quickly, please get in touch.

Once you have MTD-compliant software, then you can sign up for MTD for VAT. If we are your accountants, we can do this for you. Otherwise, you can sign up yourself using the guidance on this page.

Beware of paying twice!

If you have yet to sign up for Making Tax Digital for VAT, make sure you do it at least five days after your last non-MTD return and no fewer than seven days before your first MTD VAT return deadline. If you don’t, you could end up paying your VAT twice.

What do I do next?

The three steps you need to follow are:

  1. Choose MTD compatible software
  2. Keep digital records from the beginning of your next VAT period
  3. Sign up for Making Tax Digital for VAT and submit your return using compatible software.

The key thing is to choose the software that’s right for your business. At THP, we can advise on the best package for you and recommend options that will be fully compliant for future iterations of Making Tax Digital (in coming years, Income Tax, Corporation Tax and other returns will have to be submitted electronically too). We also have special software recommendations and a dedicated support package for landlords.

So, if the Making Tax Digital for VAT deadline is creeping up on you, don’t delay. Read this guide to get up to speed with MTD and give one of our friendly accountants a call today.

Need further advice on any of the topics being discussed? Get in touch and see how we can help.

Salutation is required
First name is required
Last name is required
Phone number is required
Email address is required
A message is required
Yes! Please sign me up to receive THP’s Email Newsletter
I have read and understand THP Limited's Privacy notice.
Avatar for Mark Ingle
About Mark Ingle

Owner-manager business specialist, Mark Ingle is key to building relationships with clients at the Chelmsford office. “I like to see clients enterprises grow and succeed.” Mark explains, “The team here has a lot to offer and I can see a lot of new businesses responding to that.”

Having worked for accountancy practices in London and Essex, Mark has worked with a range of companies varying in size. For Mark, THP stands out for its “local firm approach with the resources of a larger practice.”

Although a keen traveller, Mark is focused on giving his clients at THP the highest service, “Right now, I aim to help the clients we have to the best of my ability which will help me attract more of the right clients in the future.”

Mark’s specialist skills:

  • Annual and Management Accounts
  • Tax and VAT
  • Strategy and Business Planning
  • Marketing and Sales
  • Business Development
Join The Conversation
Cyber Essentials Plus certification
Sign up for our Newsletter