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Making Tax Digital – what you need to do before 7 August VAT deadline

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This week I have invited Theresa Middleton to tell you about Making Tax Digital – what you need to do before 7 August VAT deadline

My name is Theresa Middleton and I am the Director of the Making Tax Digital programme.

Since the introduction of Making Tax Digital on 1 April 2019, most VAT registered businesses with a taxable turnover above the VAT threshold of £85K have been required to:

  • keep digital records for all VAT transactions; and
  • use software to submit VAT returns to HMRC directly from that software, via the Making Tax Digital service.

The numbers signing up for Making Tax Digital for VAT and those making their VAT returns via software continue to increase. I’m pleased, over 600,000 businesses have signed up, but I know there’s still quite a way to go to get all mandated businesses enrolled in the service.

I would like to acknowledge the significant contribution agents have made to this success. I know it hasn’t always been easy but, having had the opportunity to meet some of you at events such as Accountex, I do get the impression it is getting better.

The 7 August deadline marks an important milestone on the Making Tax Digital journey: it’s the first filing deadline for the first tranche of businesses with quarterly VAT periods (April to June) since Making Tax Digital became mandatory.

Following on from the first Making Tax Digital deadline for monthly filers in June, it will give a good indication of the progress we’ve made and the size of the task remaining.

If you haven’t yet signed up your clients who are due to submit their first Making Tax Digital VAT return to us by 7 August, you need to act now.

Red alarm clock on computer keyboard

It’s vital to note that if your client pays by direct debit, you need to sign them up by the end of July. Businesses who pay by other methods need to be signed up at least 72 hours before their VAT return is due on 7 August. Make sure their last pre-Making Tax Digital Direct Debit has come out of their bank account before signing them up.

This GOV.UK page details the information you’ll need before sign up (such as compatible software and a new agent services account) so give yourself plenty of time to avoid any rush at the last minute.

Following feedback from agents we have improved our GOV.UK guidance and there’s now a step-by-step guide for agents showing you how to sign up your clients. This is part of a wider collection of Making Tax Digital related pages.

We’ll be contacting customers who don’t manage to sign up by their first mandated date encouraging them to do so. We have already sent out letters to those monthly filers who didn’t sign up in June or July, but I would of course rather you sign up your remaining clients now without us having to send out reminder letters!

We have recently contacted customers who were initially deferred from Making Tax Digital and had a start date of 1 October and informed them they can now sign up to Making Tax Digital.

Joining early means they’ll know their business is ready on 1 October, so clients may start contacting you about this.

Finally, thank you once again for the efforts you have made so far in relation to Making Tax Digital. My team and I have thoroughly enjoyed working with many of you and look forward to more collaboration in future!

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