News added on 16.01.2019

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MTD

VAT pilot now open to all April joiners

HMRC announced that its Making Tax Digital for VAT (MTDfV) pilot is now open to everyone who has to comply with MTDfV from April 2019. Others will be able to join soon. When and how can you get involved?

Pilot progress. HMRC reports that over 3,500 businesses are now using the MTDfV pilot, with sign-ups at 100 plus per day. But given that about 1.2 million businesses are mandated to use MTDfV pretty soon, there’s still some way to go. MTDfV kicks off for real from April 2019: businesses must comply from their first accounting period starting on or after 1 April, unless they’re in the deferrals group. If you’re deferred, your start date is delayed to periods from 1 October 2019.

Find out if you can join. The GOV.UK pages on MTD are somewhat piecemeal and so not easy to follow. You’ll find the pilot scheme information on who, what and when at “Use software to submit your VAT return”. Sole traders and (most) companies were eligible to join the pilot early on, but very few participated, while partnerships and businesses on the flat rate scheme were let in before Christmas. On 10 January 2019, VAT groups were also admitted despite their start date for MTDfV not being until October 2019.

Tip. If you want to join the pilot, and you pay VAT by direct debit, note that you can’t sign up in the 15 working days before your VAT submission date or the five working days immediately afterwards.

Can’t join yet. Currently, you can’t join the pilot if you’re:

  • part of a VAT Division
  • based overseas
  • a trust
  • a not for profit organisation not set up as a company
  • submitting annual returns
  • making VAT payments on account

If you’re in one of these groups keep an eye to see when you can join. You can check this on GOV.UK.

When to join the pilot? Don’t sign up for the pilot until you’re ready. What HMRC means by ready, is you’ve MTD-enabled software in place and you’re currently up to date with your VAT returns.

Tip. If you join the pilot, stop filing VAT returns the old way. HMRC reports that some businesses have joined and then filed a return via the portal. To use the pilot, you must have MTD software and file digitally through HMRC’s MTD system.

HMRC wants you to join the pilot asap, so you get to know how MTDfV works. If you’re not in the deferral group, you should now be able to sign up. But get your MTD software in place first.

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