Don’t leave your next VAT return until the last minute

For VAT returns (period ending June 30th) you have until 7th August to submit your return. If your taxable turnover is above £85,000, you will need to ensure you have properly registered for MTD, ensured your bookkeeping records are prepared in a compliant fashion and that your return can be submitted from “functional compatible software” (that’s HMRC language not mine!).

Don’t leave your return until the last minute however. There have been a number of issues with the HMRC Tax Service and you do not want to fall foul of the deadline if you cannot register and submit in time.

Are you really exempt?

If you’ve been to one of my seminars we have already explored the reasons HMRC may treat you as exempt from the new MTD obligations, I therefore found it amusing that this article from Accountancy Age specifically explores the most common ‘excuse’ of age in order to try and avoid compliance. As of 28 June some 2,300 applications had been made to HMRC with 80% being allowed. Whilst this figure seems high it is just a tiny fraction of the businesses that are expected to comply.

HMRC guidance states, “You do not have to follow the rules if it is not reasonably practicable for you to use digital tools to keep you records because of age, disability, remoteness of location”. They go on to note that your business may also be exempt “if your business is run entirely by practising members of a religious society or order whose beliefs are incompatible with using electronic communications or keeping electronic records”.

Given that pre-MTD there was already a requirement to file returns online I expected that if any of these ‘reasonable excuses’ were relevant to any businesses, those affected are likely to have applied for the exemption and continued preparing paper forms, however it appears there has been an increase in the applications nonetheless.

If you feel you have a genuine reason why you cannot comply with the new MTD rules please get in touch with your accountant or HMRC VAT helpline directly. Alternatively if you need support registering for MTD or with your first return please get in touch.

MTD: Can I avoid it?

In answer to the question: Probably not.