How late can I register for Making Tax Digital for VAT?

When is my first Making Tax Digital VAT return due?

If you are asking yourself “How late can I register for Making Tax Digital for VAT? (MTDfV)” you are likely to be storing up problems.  Suppose you submit quarterly VAT returns to June and have to register for Making Tax Digital for VAT (MTDfV); your first MTD VAT return needs to be filed by 7th August 2019.

Rather than count back from 7th August to start the process of converting to MTDfV, Alterledger recommends that you plan the changeover as soon as possible.  The date you should be working from is 1st April 2019.  If you are still putting pen to paper to work out your VAT return there is no time to lose!

Digital record keeping

Your first VAT return under MTDfV might not need to be filed until 7th August, but you need to keep digital records from the start of the first VAT period commencing on or after 1st April 2019.  Alterledger recommends Xero for keeping digital transactions and submitting VAT returns.

Whichever accounting software you use for your digital records, you will need to add all transactions from the start of your first MTDfV period.  For businesses with 30th Jun 2019 quarter end, this means that you should already be recording all your VAT transactions from 1st April 2019.

Signing up for MTDfV

Your accountant will be able to sign you up for MTD.  If you don’t already have an accountant, please contact Alterledger on the form below and we will be pleased to explain how we can help.

Assuming you are already registered for VAT and have access to your online HMRC account, the process of signing up for MTDfV should not take more than a few days and certainly less than a week.  The key to completing the process quickly is to prepare!

Before you sign up for MTDfV

Before you sign up for MTDfV make sure you can access your HMRC online account and can see your current VAT details.

After you sign up for MTDfV you will lose access to much of your VAT information.  It is crucial that you have a copy of your VAT registration certificate before you do anything else.  The certificate shows the date you originally registered for VAT.  This date is required to appoint an agent.  Even if you are thinking of managing your own VAT you might need this information to authenticate yourself with HMRC.

After you sign up for MTDfV you will no longer be able to view / download a copy of your VAT registration certificate and will not be able to view the date you became VAT registered.

You should retain access to recent VAT returns filed under the old system, but these won’t stay forever so Alterledger recommends that you download all available VAT returns before you apply for MTD.

Direct Debit Instruction

The easiest way to pay your VAT to HMRC is by Direct Debit Instruction (DDI).  If you already have a DDI for your VAT it will be carried over to MTDfV.  HMRC will cancel the old DDI and set up a new DDI reference for MTDfV.

Any DDI you have for any other taxes will not be used for VAT.  If you don’t already have a DDI for VAT, we recommend that you set up the DDI before you sign up for MTDfV.  MTD is still in its infusing theHMRC website.   The only way to set this up is with a paper form!

You can set up a DDI to pay your VAT under the existing VAT service online, which will be easier and faster than posting a paper form.

Choose software

Before you sign up for MTDfV you should already have MTD compatible software in place.  As mentioned above we recommend Xero for this.  If you are already using Xero then you shouldn’t have to convert any existing data.  Alterledger can advise if any adjustments are necessary.

It is advisable to start the process the of migrating / adding data to Xero as soon as you can starting with the beginning of your first VAT quarter under MTDfV.  As with any software Garbage In = Garbage Out.  For this reason make sure that you use an accountant who is Xero has the Making Tax Digital Ready certification and also Xero migration certified.

Alterledger is Making Tax Digital Ready

We have converted all our existing clients to MTDfV (where they are not exempt) and have filed MTD VAT returns using Xero.  We have also migrated businesses from a variety of accounting systems to Xero, including from manual records.

Please use the form below to get in touch and find out how we can make the process of Making Tax Digital easy for you.