THERE are still far too many businesses not complying with Making Tax Digital (MTD) regulations, many thinking that because they have an MTD filing solution, they are good to go. However, businesses MUST sign up with HMRC and ensure software is switched on for MTD submissions.

The timing of sign up is critical, as soon as a business registers, they are required to start submitting MTD compliant returns. It is recommended that businesses do not sign up until they have submitted their final non-MTD return.

If business does NOT pay VAT by direct debit

• Allow at least 24 hours after last non-MTD VAT return submission

• Sign up through the HMRC website, (confirmation sent within 72 hours)

• Do not attempt to submit an MTD VAT return until confirmation received

• Enter Government Gateway details into compliant software and follow software guidance

If business does pay VAT by direct debit

• A business cannot sign up within five working days after the deadline for last submission but must sign up at least seven working days before the filing date of first MTD VAT return.

MTD came into effect on April 1st but some businesses are eligible for an extension, including:

• Trusts

• ‘Not for Profit’ organisations, not set up as a company

• VAT divisions

• VAT groups

• Public entities required to provide additional information on their VAT return

• Local authorities

• Public Corporations

• Overseas traders

• Those required to make payments on account

• Annual accounting scheme users

If a business falls into one of these categories they should have received a letter, from HMRC stating they must be MTD compliant from October 1. If they have not received this letter and believe they are eligible for the extension, it is essential they contact HMRC to explain the circumstances and HMRC will confirm eligibility.

Without this letter business are not eligible and will be expected to start submitting MTD VAT returns from April 1.