Last updated: 13 Sep 2022 10:00 Posted in: AIA
From Tuesday 1 November 2022, businesses will no longer be able to use their existing VAT online account to file their quarterly or monthly VAT returns, HMRC has warned.
The tax authority said that businesses that file annual VAT returns will still be able to use their VAT online account until 15 May 2023. VAT-registered businesses must now sign up to Making Tax Digital (MTD) and use MTD-compatible software to keep their VAT records and file their VAT returns.
HMRC said: “If your clients do not sign up for MTD and file their VAT returns through MTD-compatible software, they may have to pay a penalty. The best way for businesses to avoid penalties is to start using MTD now.
“Even if your clients already use MTD-compatible software to keep their records and file their VAT returns online, don’t forget they must sign up to MTD before they file their next return.”
HMRC said that companies that haven’t signed up to MTD and started using compatible software must:
It said: “Your clients who file quarterly or monthly VAT returns must complete these steps in order to file their returns due after 1 November.”
Businesses may be able to get a discount on software through the UK Government’s 'Help to Grow: Digital scheme', which offers 50% off compatible digital accounting software.