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Making Tax Digital for VAT - Signing up with HMRC

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Summary

This guide explains when to sign up with HMRC for Making Tax Digital for VAT (MTD).

Description

Since April 2019, MTD for VAT rules have applied to businesses with a taxable turnover above the VAT threshold of £85,000.

From April 2022, VAT registered businesses with a turnover below the threshold must also comply with MTD rules, including submitting VAT Returns using MTD compliant software. 

If you're about to sign up your business with HMRC for MTD, you should first: 

  • Ensure that your accounts software and data are MTD-ready. Read more >
  • Ensure you've submitted your last non-MTD VAT Return.
  • If you're an accountant or bookkeeper who submits VAT Returns on behalf of clients, you must create an Agent Services Account before you can sign up your clients for MTD.

HMRC sign up restrictions

It's your responsibility to sign up for MTD with HMRC, but there are certain restrictions on when you can do this as follows:

If you pay by Direct Debit If you don't pay by Direct Debit
Allow five working days after filing your final non-MTD VAT Return before signing up. Allow 24 hours after filing your final non-MTD VAT Return before signing up.
Sign up at least seven working days before you submit your first MTD VAT Return. Sign up at least 72 hours before you submit your first MTD VAT Return.
If submitting late:
Allow five working days after filing your late return before signing up.
If submitting late:
Allow 24 hours after filing your late return before signing up.

Once you've signed up with HMRC, before making your first MTD VAT Return submission, you need to switch on the MTD feature in your software. 



 

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