From Monday 15th May 2023 there are new changes to the VAT online account, and you will no longer be able to use your existing VAT online account to file your annual VAT returns.
All VAT-registered businesses must by law, now use Making Tax Digital (MTD) compatible software to keep their records and file VAT returns.
What do you need to do if I don’t have MTD-compatible software?
If you haven’t already started using compatible software here are some steps you should follow:
- Choose MTD-compatible software that’s right for the business. You can find a list of compatible software here.
- Check your software permissions to allow it to work with MTD. Go to GOV.UK and search ‘manage permissions for tax software’ for information on how to do this.
- Keep digital records for current and future VAT returns. You can find out what records you must keep digitally here.
- File your future VAT returns on time using MTD-compatible software.
If you use Sage 50 Accounts software v24.2 or above it is already MTD compatible, you do not need to take any action and are good to go!
Can I apply for an exemption from MTD?
If you are already exempt from using MTD-compatible software or your business is subject to an insolvency procedure, you will be automatically exempt.
You can check to see if you can apply for an exemption here and HMRC will consider applications on a case-by-case basis.
Will I be charged a penalty if I submit a VAT return late?
From 1st January 2023, if you submit a VAT return late (this includes nil payment returns), a penalty point will be issued to you. Once you reach the penalty point threshold you will receive a £200 penalty. Each subsequent late submission while you are at the threshold will be subjected to a further £200 penalty.
Luckily, if you are currently using Sage 50 Accounts (v24.2 or above) or Sage Business Cloud software then you are already using compatible software. If you’re needing to make the step towards your new compatible software, or you just need a helping hand with your existing software in preparation for MTD then please get in touch. We have software demos at the ready and training packages to guide you through the process Get in touch or why not join one of our Facebook community support groups?
“Any advice relating to accounts or tax should be sought from your tax accountant. Sage Accounts Solutions Limited will not be held responsible for any loss or damage caused as a result of the information contained herein.”