Making Tax Digital first quarterly return deadline and critical sign up advice

In just a few week’s time, UK businesses mandated to use Making Tax Digital (“MTD”) for VAT from 1 April 2019 will be due to submit their first quarterly VAT return under MTD for the quarter ended 30 June 2019. The deadline for this is 7 August 2019.

It is important that businesses sign up for MTD at the right time. Readers are reminded that businesses which must submit VAT returns under the MTD for VAT rules must sign up to the service. HMRC will not be signing businesses up. This sign-up can be done by the business itself or its agent. If a business is not already signed up, it must wait at least 24 hours after submitting its final non-MTD VAT return before signing up.

If payment of VAT is made by direct debit, businesses should allow five working days after the submission deadline for the final non-MTD for VAT return before signing up. Where payment is made by direct debit the business must sign up at least 7 working days before the first MTD for VAT return is filed.

This means that businesses due to sign up and submit their quarter ended 30 June 2019 return in accordance with MTD for VAT and who pay by direct debit should sign up by Friday 26 July 2019 at the latest. However businesses are being advised not to wait until the last minute to sign up in order to avoid issues with registration and new systems which can happen the first time a business is faced with a change of this type. Businesses must also decide on a suitable software package to use.

Businesses should also ensure that they receive email confirmation from HMRC that they have signed up before they file their first MTD for VAT return; HMRC are advising that this can take up to 72 hours to arrive.

MTD for VAT is now available to all VAT registered traders except those that use the VAT GIANT (Government Information and NHS Trust) service. GIANT users are currently required to submit additional information with their VAT return.

Due to an ongoing review by the government into VAT simplification in the public sector, HMRC is further extending the deferral period for GIANT users beyond the October 2019 date that currently applies. HMRC will be in touch again regarding this.

HMRC has also been in touch regarding notification of change to the agent services account creation process.

It has been a requirement since 2009 for accounting service providers to register for Anti Money Laundering Supervision (AMLS).

Agents are asked to enter their AMLS details when they create an Agent Services Account (ASA), which allows them act for their clients under MTD. To ensure that all agents are able to create an ASA and to sign their clients up in good time to meet their MTD obligation in good time, HMRC has changed the journey to allow the creation of an ASA on the basis of a pending AMLS application. However if the agent’s application is refused agent services access will be withdrawn.

Agents should only sign businesses up using their agent credentials, not those of the businesses. Please note that only those acting as paid agents should create an ASA to file on behalf of clients.

HMRC have also updated the guidance on who can join the MTD for income tax pilot. Individuals can now sign up to MTD for income tax if:

They are a sole trader with income from one business, they rent out a UK property or both;
Their self-assessment tax returns and payments are up to date; and
They are UK resident for tax purposes

Currently, individuals won’t be able to take part if they need to report:

income from any other sources;
any other payments that are taxable or that you claim tax relief on

Anyone signing up to the MTD for income tax pilot must have an MTD for income tax software product. At present the HMRC list of software products only four providers.

The following MTD guidance and publications have also been recently updated:-

TaxSource Total

Making Tax Digital first quarterly return deadline and critical sign up advice