Door closes on old Gateway for VAT return submission
On 1 November 2022 the old online Government Gateway Account is closing for the submission of monthly and quarterly VAT returns. Businesses are no longer be able to use this channel to submit their VAT returns and risk penalties for non-compliance.
On 1 April 2022, Making Tax Digital (MTD) became mandatory for all VAT-registered businesses, regardless of turnover, including those voluntarily registered for VAT.
This means it is a legal requirement to complete and submit VAT returns using compatible software that connects to HMRC’s systems. Manual records and some accounting software packages are no longer acceptable. Submitting an online VAT return via the Government Gateway account will only be available to a few businesses who have been granted a digital exclusion exemption by HMRC or who submit annual VAT returns (until May 2023).
Up until now, HMRC has offered a ‘soft-landing’ approach to MTD compliance regarding penalties. This was to allow businesses time to deal with the changes, however this comes to an end on 1 November.
Statistics from ICAEW (Institute of Chartered Accountants in England and Wales) show that 10% of VAT registered businesses above the VAT threshold (who should have been registered for MTD from 1 April 2019) and 55% of businesses below the threshold have not registered. These businesses may now face penalties.
Registration for MTD for VAT is not automatic, even if your business is already VAT-registered and using approved accounting software.
All businesses need to complete a registration process via their Government Gateway account.
If you have a VAT registered business and have not registered for MTD for VAT, we suggest, as a matter of urgency, that you view the GOV.UK website for guidance on approved software and how to sign up. Here’s the link you need.
MTD for Income Tax
It’s worth pointing out, that from April 2024 Making Tax Digital for Income Tax will be introduced. From this date, any self-employed person or landlord who earns more than £10,000 in total (before the deduction of expenses and other tax reliefs) will be required to digitally file records of their income and expenditure with HMRC on a quarterly basis. This will mean keeping digital business records using software which is approved by HMRC and compatible with their systems.
If you have concerns about your compliance with the new rules, we urge you to contact our dedicated team of MTD experts at firstname.lastname@example.org or alternatively, call 01289 306688.