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When should I sign up for Making Tax Digital for VAT?

Created on  | Last modified on 

Summary

If you're about to sign up with HMRC for Making Tax Digital for VAT (MTD) , there are a few things we recommend you check first.

Resolution

Since April 2019, businesses with a VATable turnover above the VAT threshold have had to comply with HMRC's Making Tax Digital (MTD) rules, which included submitting their VAT Return using MTD compliant software.

All remaining VAT registered businesses will need to be signed up to MTD for VAT by 1 April 2022, unless HMRC have approved that the VAT registered business is exempt.

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

  • Ensure that you have MTD-ready software. 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 first 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 5 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 7 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 5 working days after filing your late return before signing up.
If submitting late:
Allow 24 hours after filing your late return before signing up.


Find out more about MTD


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