MTD: Who, When & Exemptions?
The MTD for VAT requirements will apply to all VAT registered businesses and organisations from 1 April 2022.
This includes unincorporated businesses, partnerships, companies, LLPs, trusts, non-UK businesses registered for UK VAT and charities.
VAT registered businesses with must now make sure they opt in to MTD and file their VAT returns using MTD compatible software.
An exemption for the digitally excluded is included in the regulations and mirrors the current exemptions from online filing for VAT. The exemptions cover those that that do not use computers for religious reasons and those that are unable to comply because of age, disability or location (or for any another reason).
Existing exemptions from online filing for VAT have been carried over automatically to MTD for VAT. Those that are not currently exempt from VAT online filing may find it difficult to persuade HMRC that the exemption should apply. Difficult cases will arise, particularly where an individual has some basic digital skills such as being able to send emails, but would not be able to cope with accounting software or a spreadsheet. There is no specific age at which the exemption applies; each case will be taken on its merits. Location covers those who cannot obtain access to broadband because of where they are located. The exemption will not apply to those who could sign up for broadband but have not done so.
To apply for an exemption you will need:
- your VAT registration number
- your business name and address
- details of how you currently file your VAT return
- the reason you think you’re exempt from Making Tax Digital
You will need to ensure you are on MTD-compatible software from 1 April 2022 ready to submit your first VAT return on the following guidelines.
VAT Return Quarters
|VAT return quarters||Last VAT return due under the old system||MTD for VAT start date for digital records||First VAT return due under MTD|
|June, September, December and March||Quarter ended 31 March 2022||1 April 2022||Quarter ended 30 June 2022|
|July, October, January and April||Quarter ended 30 April 2022||1 May 2022||Quarter ended 31 July 2022|
|August, November, February and May||Quarter 31 May 2022||1 June 2022||Quarter ended 31 August 2022|
For more information on making tax digital please contact Emma Hardwick from our Plus Advisory team.