Changes to HMRC’s MTD guidance and procedure - More Than Accountants Skip to the content
  • 0161 804 0808
  • info@morethanaccountants.co.uk

More Than AccountantsMore Than Accountants
  • Who We Help
    • Sole Trader Accounting
    • Small Business Accountants
    • Limited Company Accountants
    • Partnership
    • Limited Liability Partnerships
    • Contractor Accountants
    • Xero Accountants
  • Online Accountancy Services
    • Company Accounts
    • Tax Returns
    • VAT Returns
    • Bookkeeping Services
    • Financial Reports
    • Payroll Services
  • Knowledge
    • Blog
  • Contact Us

Get A Quote

  • Who We Help
    • Sole Trader Accounting
    • Limited Company Accountants
    • Partnership
    • Limited Liability Partnerships
    • Contractor Accountants
  • Online Accountancy Services
    • Company Accounts
    • Tax Returns
    • VAT Returns
    • Bookkeeping Services
    • Financial Reports
    • Payroll Services
  • Quote Online
  • Blog
  • Contact Us
Categories
Accountancy News

Changes to HMRC’s MTD guidance and procedure

  • Post author By Daniel Rose
  • Post date March 2, 2019
  • No Comments on Changes to HMRC’s MTD guidance and procedure

As predicted, January brought about a revised version of HMRC’s VAT Notice 700/22: Making Tax Digital for VAT. The purpose of the notice is to explain the digital records that businesses will need to keep, and to supply information on what counts as compatible software, and it is important that all businesses begin to familiarise themselves with what is going to be expected, when the MTD process begins in April 2019. This version corrects a number of errors in the original, alters the conditions for applying for the ASA, and further details the soft-landing period. Detailed below are some of the changes to note…

Turnover Test (to check exemption on the grounds of turnover)

As of 1st April 2019, if a company’s taxable turnover is above the VAT registration threshold, they must follow the rules set out in the VAT notice. Should the taxable turnover drop below this threshold at any point, they will still need to continue to keep digital records, and submit VAT returns with compatible software. The original version of this notice suggests that if a company’s turnover had ever breached the VAT threshold, they will need to follow the new MTD rules from April 2019. However this is not correct; the turnover for the 12 month period ending immediately before the date of the turnover test should be considered. The revised VAT notice provides three examples of businesses with different dates for starting MTD.

Want to switch to More Than Accountants? You can get an instant quote online by using the form below. In a like for like comparison for services we are up to 70% cheaper than a high street accountant.

Example 1 – a business’s quarterly return covers the period of 1st March to 31st May 2019. This business’s taxable turnover exceeds the VAT threshold, so the business will need to comply with MRD rules for the period starting 1st June 2019.

Example 2 – a business that was not previously registered for VAT is required to do so from the 1st of September 2019 as the taxable turnover of the previous 12 month period has exceeded the threshold. This business must follow the MTD rules for the VAT returns they are subsequently required to make (so from the 1st of September).

Example 3 – a business is registered for VAT but has a taxable turnover below the MTD threshold until November 2019. This business will be required to follow the MTD rules for any VAT period that starts on or after the 1st December 2019.

The revised VAT notice 700/22 indicates that the MTD for VAT rules apply from 1st April 2019, so 31 March 2019 is the earliest date on which the annual turnover level can be tested. These three examples offer potentially different times scales by which a business has to prepare for MTD reporting.

Soft landing

HMRC has detailed a period of time, termed ‘The soft landing period’ for businesses to get in place the digital links between all parts of their functional compatible software. During this period the new rules for digital links will not be enforced with penalties. For most the soft landing period is the 1st of April 2019 to the 31st of March 2020. If HMRC has directed a business to start following the MTD rules for VAT periods starting on or after the 1st of October 2019, the period is 1st October 2019 to the 30th September 2020. During this soft landing period, where a digital link has not been established, HMRC will accept the use of cut and paste as being a digital link for these VAT periods. The soft landing period only applies to the enforcement of digital links

between software products, and not penalties issued for non-compliance with the MTD requirement to file VAT returns using MTD compatible software.

Exemptions from MTD

There are some slight changes in this revised version of the notice with regards to the other exemptions from MTD. In a progression from the HMRC’s previous position, this version of the notice acknowledges that someone may not be able to meet all the MTD requirements, even if the business currently manages to submit their VAT return online. In reference to the listed grounds for exemption the notice states “These may apply even if you are not currently exempt from online filing for VAT.” We can expect to see further guidance regarding applying for an exemption soon.

Agent Services Account sign-up

In December 2018, HMRC issued a new set of data which needs to be provided before you can set up an Agent Services Account (ASA) for your business. In addition to your/your firm’s UTR number, you will now be required to enter the details of your company’s money laundering supervisory body including membership number and expiration dates. Most accountants and tax advisers will have a professional body supervising them for the anti-money laundering regulations. Accountants who are not supervised will need to register directly with HMRC for money laundering supervision.

There is a likelihood that more changes and corrections will come to light before MTD for VAT commences in April, so watch this space!

Share this post

By Daniel Rose

Daniel is the co founder of More Than Accountants and an ACCA Chartered Accountant. He will be more than happy to help More Than Accountants clients implement any guides or strategies that he has posted to the blog. If you would like to learn more about becoming a More Than Accountants client you can quote online by using our Unlimited Accountancy Services Quoting Tool.

View Archive →

← Achieving your 2019 sales goals – A step by step process. → Invoicing with Xero

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

By Daniel Rose

Daniel is the co founder of More Than Accountants and an ACCA Chartered Accountant. He will be more than happy to help More Than Accountants clients implement any guides or strategies that he has posted to the blog. If you would like to learn more about becoming a More Than Accountants client you can quote online by using our Unlimited Accountancy Services Quoting Tool.

View Archive →
  • 0161 804 0808
  • Get An Online Quote

Registered office :
Burnden House, Viking Street,
BL3 2RR

0161 804 0808
info@morethanaccountants.co.uk

Who We Help

  • Sole Traders
  • Limited Companies
  • Partnerships
  • Limited Liability Partnerships
  • Contractor Accountants
  • Small Business Accountants
  • Xero Accountants
Linkedin Youtube Facebook

Services

  • Company Accounts
  • Tax Returns
  • VAT Returns
  • Bookkeeping Services
  • Financial/Management Reports
  • Payroll Services

Resources

  • Knowledge Base
  • Blog
  • Quoting Tool
  • Accountancy News
  • Accountancy Software
  • Business Funding
  • Business Practice
  • Business Tools and Process Automation
  • Company News
  • Customer Relationship Management CRM
  • Entrepreneurship
  • Industry News
  • Marketing

Recent Blog Posts

Recent Posts
  • Practical considerations when setting up a new business in the UK
  • Forty-year high inflation: the UK braces itself for rocky times ahead
  • Making business accessible to everyone
  • Labour shortages in the UK; how can businesses stymie the great resignation?
  • Understanding supply chains and the challenges they face

© 2021 More Than Accountants Limited 

More Than Accountants is a limited company registered in England under company number 09974015.
Content is for general information only. Always take advice.
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT