This post highlights a compliance risk with VAT Making Tax Digital ("MTD") implementation which some mandatory submission registrations have been caught out with in the initial implementation cycles.
This post is prepared for all those VAT Registrations whose enrolment was deferred until periods beginning 1 October 2019, which includes VAT groups, trusts, local authorities, public companies, payments on account and various other.
VAT registrations are not auto-enrolled into the MTD service.
Companies need to undertake the enrolment task themselves.
The MTD HMRC software is recorded on a separate system to the historic online VAT Return facility. In order that HMRC transfers you across to the new system, you need to apply for your record to be transferred.
Timely payment of your VAT liability is at risk, especially if you have set up a direct debit to clear your VAT account, because HMRC will need to contact you to perform new validation checks before the bank details can be transferred to the MTD system.
For VAT registrations that are mandated for periods beginning 1 October 2019, HMRC recommends that you apply during the following periods:
- Monthly filing apply from 15th to 27th November 2019
- Quarterly filing apply from 15th November 2019 to 23 December 2019
The above are recommendations and there is some scope for slippage. However, note that if you pay by instalments, you should aim to arrange for the enrolment earlier to meet the month end payment deadlines.
Please note that if you submit through the old VAT system, you will be blocked from using the MTD system for the same period.
Further information on how to enrol is found at https://www.gov.uk/guidance/sign-your-business-up-for-making-tax-digital-for-vat
Please don't hesitate to contact me at firstname.lastname@example.org if you need help preparing for the tighter MTD requirements that will be introduced during 2020. I can help you assess the options and implement the solution which best suits your risk appetite and budget.