According to HMRC's latest statistics on Making Tax Digital for VAT less than half of all VAT registered business have so far signed up for Making Tax Digital for VAT. At least a third (and maybe many more) of those who are supposed to be in the new system have not signed up or signed up and failed to file.

  • Officially there are some 2.6 million VAT registered business in the UK. HMRC now report that 1.1 million have signed up to MTD for VAT.
  • Businesses file returns monthly or quarterly, according to their 'VAT stagger', stagger 1 being those with March, June, Sept etc quarter filings, stagger 2: April, July, Oct, etc, and stagger 3 May, Aug, Nov etc.
  • So far only staggers 1 and 2 have been required to file under the new system. Stagger 3 have a return filing deadline of 7 October 2019.
  • Some business have been deferred and their sign up date for MTD for VAT is 1 October. Businesses who are trading below the VAT threshold are not within Making Tax Digital for VAT

HMRC Statistics

Piecing together official figures, it is estimated that:

  • There are about 487.000 business are in stagger 1.
  • 310,000 in stagger 2 and 300,000 in stagger 3.
  • About 200,000 business who are trading below the VAT threshold have signed up voluntarity.
  • 1.1 million businesses have signed up.
  • This leaves a hole in the figures of 1.5 million who are made up monthly filers (totals unknown) those not required to sign up or have not signed up and those who are deferred.

HMRC has previously confirmed that 90% of monthly filers and some 76% of stagger 1 businesses signed up on time to file for 7 August. It is unclear how many in their group were successful in filing.

HMRC now reports that 230,000 stagger 2 business (74%) signed up, meaning that 80,000 stagger 2 businesses have yet to sign up for MTD for VAT and (we presume) filed under the old system for their August quarter. They are being sent reminder letters. 

40% of stagger 3 businesses have yet to sign up.

HMRC now says that 94% of stagger 1 and 2 businesses who did sign up filed their returns on time. That means that so far there was a 6% failure rate amongst those who signed up.

Conclusion

Roughly speaking, 25% of each stagger have failed to sign up and 6% of those who signed up have failed to file, and hence roughtly 1/3 of business are not yet successfully within MTD for VAT.  This does not bring into account the remaining £1.5 million who have not signed up at all. Perhaps more meaningful statistics will be published in due course.

Penalties

No tax penalties will be charged if you pay your VAT on time.

If you fail to get your return in on time and cannot pay on time you will not be fined if you can show that you did all you could to try and file under the new system (or the old one if you were unable to use the new system).

See VAT penalties

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