MTD for VAT rules will apply to all VAT-registered businesses from Friday 1st April

The next milestone of the government’s rollout of Making Tax Digital (MTD) is very nearly upon us: from the end of this week, MTD for VAT rules will apply to all VAT-registered businesses. 

What does this mean?

If your business is VAT-registered, the option to file VAT returns through HMRC’s website will no longer be available. For all your business’s VAT periods starting on or after Friday 1st April 2022, you will need to use MTD-compatible software like FreeAgent to: 

  • store your business records digitally
  • send your business’s VAT returns to HMRC

What do I need to do?

If your business is VAT-registered and you’re not following MTD for VAT rules already, you will need to use MTD-compatible software to store your business records and submit VAT returns for all of your business’s VAT periods starting on or after 1st April 2022. In order to do this, you will need to complete the following steps before your first VAT period starting on or after 1st April:

  1. Sign up to MTD-compatible software, like FreeAgent. If you have a business current account with NatWest, Royal Bank of Scotland or Ulster Bank NI, or a business account with Mettle, you can get FreeAgent for free, for as long as you retain your account. 
  2. Sign up for MTD on HMRC's website. You'll receive an email within 72 hours to confirm that you can submit VAT returns using your chosen software.
  3. Connect your MTD-compatible software with HMRC to allow it to file VAT returns on your behalf. Find out how to do this in FreeAgent.
  4. Prepare your accounts for MTD for VAT in your MTD-compatible software. Find out how to do this in FreeAgent. 

Find out more about HMRC’s Making Tax Digital initiative and how FreeAgent can help.

Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.

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