As MTD for all VAT registered businesses makes its final approach, there will inevitably be some that haven't taken steps to get ready for this significant change to the way they file their VAT.
In a nutshell.
If you currently file your VAT returns using the HMRC portal and are VAT registered, you will not be able to use this portal from 1 April 2022. If this is you, and you haven't done anything about it yet - what can you do now to minimise your chances of missing your deadline and incurring penalties?
Notify HMRC now if you are exempt
There are a few exemptions to MTD but HMRC will assume you are in unless you notify them of your exemption before your mandatory start date, which is from 1 April 2022.
Check for software upgrades
If you currently use accounting software you should check what upgrades they are providing as not all software developers are providing a solution for MTD. Check if there are any associated costs of an upgrade as these can run into the thousands of pounds.
Consider bridging software
If your accounting software isn't providing a solution, or if you currently use a spreadsheet based accounting system, then you will need to use something called "bridging software". This is a very simple and low cost way of digitally filing your VAT return with HMRC. Your accountant may be able to provide a solution so speak to them in the first instance. If they can't help, there are others on the market but do make sure that it is fully MTD compliant by checking the software list on the HMRC website.
Hillier Hopkins offers an MTD compliant bridging software solution called VAT Controller. Many clients are choosing this as a quick and straightforward way of complying with MTD.
Take action now
"With only a few weeks months, time is limited to get ready. Some businesses are choosing to use bridging software now as an affordable short term fix before investing significant time and money upgrading their accounting system later.". Ruth Corkin, VAT and Indirect Tax Advisory.
One more thing..
If you file monthly returns and pay your VAT by direct debit. Then there are only 2 days in May set up your MTD filing account and they are 15th and 16th May - put them in your diary now!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
