Businesses that file annual VAT returns will still be able to use their VAT online account until 15 May 2023.
By law, 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.
The HMRC warned that if clients do not sign up for MTD and file their VAT returns through MTD-compatible software, they may have to pay a penalty.
“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 if they have not already done so,” the HMRC said in a statement.
If clients haven’t signed up to MTD and started using compatible software already, they must follow these steps now:
Step 1. Choose MTD-compatible software that’s right for them — you can find a list of software, including free options, on GOV.UK
Step 2. Check the permissions in their software — once they’ve allowed it to work with MTD, they can file their return easily. Go to GOV.UK and search “manage permissions for tax software” for information on how your clients should do this.
Step 3. Keep digital records for their current and future VAT returns — you can find out what records they need to keep on GOV.UK
Step 4. Sign up for MTD and file their future VAT returns using your MTD-compatible software — to find out how to do this, go to GOV.UK and search “record VAT”.
Clients who file quarterly or monthly VAT returns must complete these steps in order to file their returns due after 1 November 2022.
VAT Registration Service
The way customers register for VAT changed from 1 August 2022. To access the VAT Registration Service (VRS) on behalf of clients, tax agents should use the following link: VAT: registration applications, exceptions and changes and use their Agent Services Account (ASA) credentials to sign in clients. If agents register using this route they will be asked to provide their name, phone number and email address. HMRC will only use these details if it needs to contact the agent about their application. The new VRS link will be available directly from the agents’ ASA account soon.
If tax agents use the VRS available through an older AOS portal or from GOV.UK, they will need to verify their identity with their National Insurance number, name and date of birth.
Businesses may be able to get a discount on software through the UK Government’s Help to Grow: Digital scheme, which offers 50 per cent off compatible digital accounting software.
