Making Tax Digital for VAT sign up illustration

Introduction

This guide is intended to illustrate the correct period in which to sign up for Making Tax Digital for VAT, depending upon the VAT stagger and the first return to be filed under MTD.

No responsibility can be accepted for the consequences of any action taken or refrained from as a result of these illustrations. They are not a substitute for detailed professional advice. The sign-up illustration has been submitted to HMRC for confirmation of accuracy, and we await their reply.

We have illustrated the sign up periods up to and including the first mandated VAT period for those businesses mandated from 1 April 2022.

Once signed up, HMRC will expect the next VAT return due to be submitted under MTD, so it is vital to sign up at the right time.

Do not sign up unless you are confident you can submit your next VAT return using MTD compatible software.

Do not sign up to submit the current period VAT return until the previous period's return has been submitted.

HMRC guidelines

HMRC will send you a confirmation email within 72 hours of signing up. Do not submit a VAT Return until you receive the confirmation email.

Businesses that currently pay VAT by Direct Debit should not sign up in the 7 days (see written or diagrammatic illustrations for exact dates) leading up to, or the 5 days after their VAT Return is due.

Non-direct debit payers should not sign up in the 3 days leading up to VAT return being due

The timeline statement by HMRC can be found at https://www.gov.uk/guidance/sign-up-for-making-tax-digital-for-vat

Assumptions used

Previous VAT returns have been filed on time and are up to date.

VAT returns are filed on the due date - if returns are filed earlier this could extend the sign up period for the next return - use the HMRC guidelines and assumptions here to work out the date range.

However, if the business pays by direct debit then submitting the return early does NOT extend the sign up period for the next return.

Standard tax periods (monthly or quarterly) are used - otherwise use the HMRC guidelines and assumptions here to work out the date range.

The 7 days up to the submission date includes the submission date itself.

The written explanation can be found here.

The sign up illustration can be found here.