From Tuesday 1 November 2022 businesses will no longer be able to use the existing VAT online account to file monthly or quarterly VAT returns.
This is because, by law, all VAT-registered businesses must now be signed up to Making Tax Digital (MTD) and MTD-compatible software to keep VAT records and file VAT returns.
If you have not signed up for MTD and file VAT returns through MTD-compatible software, you will be liable for penalties.
What businesses need to do now
If you haven’t already signed up for MTD and moved over to compatible software then you must follow these steps:
Step 1. Choose MTD-compatible software that’s right for you, such as Xero
Step 2. Check the permissions in the software – once you’ve connected it with MTD, you can file returns easily. This is something CKLG Business Services team can assist you with.
Step 3. Keep digital records for current and future VAT returns – you can find out what records you need to keep on GOV.UK.
Step 4. Sign up for MTD and file future VAT returns using your MTD-compatible software
If you have already signed up to MTD, no further action is required.
Due to file by 7 November 2022?
If your business’s turnover is under the VAT threshold of £85,000 and you haven’t yet signed up to MTD in time to file the next return by 7 November 2022, you can still use your existing VAT online account BUT for that return only.
You must then complete the steps above in order to file any returns due after 1 December 2022. HMRC should be contacting businesses directly to advise.
Businesses that file annual VAT returns will still be able to use their existing VAT online account until 15 May 2023.
Our Business Service Team specialise in using Xero, which is MTD for VAT-compatible software, if you need assistance, please speak to a member of our Business Services team on 01223 810100.
