I’m writing to remind you that from Tuesday 1 November 2022, your clients will no longer be able to use their existing VAT online account to file their quarterly or monthly VAT returns. 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. 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 if they have not already done so. What do businesses need to do now, or they could face a penalty If your 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’. Your 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 the 1 August 2022.
To access the VAT Registration Service (VRS) on behalf of you clients, you should use the following link VAT: registration applications, exceptions and changes and use your Agent Services Account (ASA) credentials to sign in your clients. If you register using this route you will be asked to provide your name, phone number and email address. We will only use these details if we need to contact you about your application. The new VRS link will be available directly from your ASA account soon. If you use the VRS available through your older AOS portal or from GOV.UK, you will need to verify your identity with your National Insurance number, name and date of birth. Help and support avaliable You can find more information on how to support your clients on GOV.UK, including a step-by-step guide to signing up for MTD on your clients’ behalf.
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. You can signpost your clients to help and support for Making Tax Digital on GOV.UK, where they can find useful videos, register for live webinars, and see the latest guidance and updates on MTD for VAT. Protect yourself and your information Never share your HMRC sign-in details. Someone using them could steal from you or make a fraudulent claim in your name. If someone contacts you saying they’re from HMRC and wants you to transfer money urgently or give personal information, never let yourself be rushed. Take your time and check HMRC’s advice about scams on GOV.UK. Yours faithfully.