8 April 2020
Eligible businesses with a taxable turnover over the VAT threshold of £85,000 had to register for Making Tax Digital to submit their VAT returns from 1 April 2019. Businesses initially affected by this new initiative include sold traders, partnerships, LLPs, landlords and charities.
The start date for some businesses was deferred to 1 October 2019, including traders based overseas, annual accounting scheme users, local authorities, public corporations and not for profit organisations that aren’t set up as a company. HMRC has notified these businesses that they are in the so-called ‘deferral group’ for Making Tax Digital.
Likewise, HMRC appreciates that new regulations and requirements do take time for businesses to adjust, so they will “take a light touch approach to penalties by not issuing filing or record keeping penalties where businesses are doing their best to comply with MTD” in the first year of mandation, according to Financial Secretary, Mel Stride.
Although this “soft landing period” for Making Tax Digital for VAT was due to end on 31 March 2020, the soft landing period will now be extended, and only end from VAT periods starting on or after 1 April 2021, due to the impact of coronavirus. Plus, new plans have been announced detailing the expansion of MTD to all VAT-registered businesses from April 2022 and to all taxpayers who file income tax Self Assessment tax returns for business or property income over £10,000 annually from April 2023.
While this statement reassures businesses not to panic over the implementation of MTD, it’s key that those affected are doing all they can to keep on top of the changes and upcoming VAT returns deadlines.
The good news is that, although the VAT returns system is undergoing modernisation, the frequency or deadlines for payments have not changed, whether for monthly, quarterly or annual schemes.
When is your business’s Making Tax Digital submission due?
MTD deadlines for businesses that file monthly
Whether you pay your VAT monthly or quarterly, under Making Tax Digital or Government Gateway, the deadline for submitting your return and paying any VAT you owe is 1 month and 7 days after the end of the VAT period.
MTD deadlines for businesses that file quarterly
Most businesses file their VAT returns 4 times a year, with the following set of quarterly VAT periods:
- 1 January – 31 March, to be filed by 7 May
- 1 April – 30 June, to be filed by 7 August
- 1 July – 30 September, to be filed by 7 November
- 1 October – 31 December, to be filed by 7 February
For businesses that pay VAT quarterly, your VAT return deadline remains at 1 month and 7 days after the end of your VAT period. For example, the VAT return that covers 1 April – 30 June needs to be filed by 7 August.
MTD deadlines for businesses that file annually
The first returns for businesses that submit annual VAT returns will be April 2020 at the earliest.
Need help with Making Tax Digital?
If you’re not sure of when your business should be submitting VAT returns, or whether you should have already registered for MTD altogether, we can help you. Our team of experts have the skills to ensure your accounts are fully compliant and we are committed to helping local businesses migrate to MTD as easily as possible.
Be sure to contact us at your earliest convenience and we’ll provide the support you need to get started with Making Tax Digital.