HMRC, VAT MTD and the HMRC Online Siblings

If you are still manually entering VAT figures in the boxes on HMRC's Online VAT facility then you are not MTD compliant!


The confusion may occur because there are two VAT Online systems within HMRC.

- The original VAT Online including your data and submissions prior to MTD, which you want to be able to access as part of your historical records,

- The new MTD Online facility which includes the integration capability to communicate with third party software for MTD.


These are siblings, but they don't communicate.


Businesses need to physically sign up for the younger MTD system and then physically ONLY use that MTD login details to link your accounting software to HMRC. Once that task is performed, then submission of VAT Returns becomes much easier and the time saved in transferring data can be used to improve your reviews.

The old system simply stands as a historical archive of your pre MTD returns and payments.


So how much of a problem is this?


Surely MTD has been in place since April 2019, wouldn't I have heard more if it was a problem?


It may be just that you didn't understand that you had a problem because you didn't fully understand the rules, or thought that using the original online submission process was OK.


It may also be that HMRC haven't been pushing hard as Covid19 has absorbed an immense amount of HMRC effort.


HMRC issued a report last year indicating that a massive 17% of businesses falling within the scope of MTD had not signed up for the service.

That was the figure as at March 2020 almost a YEAR after implementation of the requirements!

Will there be much difference between one year and two years, especially with the additional stresses of Covid19 plaguing the world since the report was created?


Online Accounting software such as #Xero, #Quickbooks, #Pandle and #FreeAgent all have #VAT MTD capabilities, so this is easy to fix.


Step 1 - Sign up for MTD using the green button on https://www.gov.uk/.../sign-up-for-making-tax-digital-for...

Step 2 - Go to the VAT return area of your accounting software and select the option to connect to HMRC.


Spend 5 minutes to check whether your software is submitting via the VAT MTD portal yet.


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