With the deadline to sign up to pay your VAT return by direct debit under MTD for VAT now passed, HMRC have issued an update to reassure businesses who missed the registration window. In their latest communication, HMRC advised that businesses who missed the sign-up window will not be penalised this time, and those businesses should now complete their August 7th return under the old system before signing up to MTD for VAT.
“Although we will not penalise them [businesses which missed the deadline], they will receive a letter from us telling them that they missed the deadline and asking them to take action.”
With the danger of penalties lifted for the time being, this means you can submit your August 7th return using the old VAT system. It’s important to note that you need to do this before you sign up to MTD for VAT as you can’t revert to using VAT100 after you’ve registered for Making Tax Digital. Once your return has been submitted and your direct debit has been collected, then you can sign up to MTD for VAT. MTDfVAT allows you to maintain your current bookkeeping method – including spreadsheets – and creates a digital link to HMRC to file your MTD-compliant VAT return.
If you are not planning to pay your VAT by direct debit, then you have until 72 hours prior to your first return to sign up. Remember to allow 24 hours after your final submission under the old VAT system before registering for MTD for VAT.
HMRC have previously advised that they “won’t be issuing filing or record keeping penalties to businesses doing their best to comply.”
Our bridging software is designed to integrate with your current bookkeeping set up, whilst allowing you to meet MTD for VAT rules. Sign up to MTDfVAT here.