HMRC will change the system used to store the VAT records of businesses not registered for Making Tax Digital for VAT (MVD) from March 2021.

  • VAT registered businesses who are already enrolled for MVD are not affected by this change.
  • Action is required by VAT registered businesses not currently within MVD, and their agents, no later than 28 February 2021.

Businesses

Businesses should continue to file their VAT returns through their Business Tax Account (BTA) as normal, although they may notice a change in how the service looks.

  • To continue paying VAT by direct debit, HMRC will require a current and valid e-mail address for the business.
    • HMRC will request businesses provide this information, ideally via their BTA.
    • This allows HMRC to comply with UK banking regulations to notify payers of the date and amount which will be taken.
  • Businesses that use eXtensible Markup Language (XML) to file their VAT returns will no longer be able to do so from April 2021.
    • HMRC will contact businesses who use XML reporting and encourage them to submit VAT returns via MVD compatible software or through their BTA.
    • XML is not the same as MVD enabled software.

Agents

  • Agents will no longer be able to use the agent online service to submit VAT returns. Returns must be submitted via the agent’s Agent Service Account (ASA).
    • Where an agent has not yet created an ASA, they should do so before 28 February 2021 and copy across their VAT clients.

Links

Making Tax Digital (for VAT) tool: Who has to join?
This Virtual Tax Partner © 'VtaxP' © tool checks Making tax digital for VAT. Will it apply to me? Am I exempted? Am I deferred? Do I need new software to file VAT returns online?

Making Tax Digital for VAT: Who is digitally excluded?
Who can claim exemption from Making Tax Digital for VAT? What are the issues?

 

 

 

 

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