Market leading insight for tax experts
View online issue

Making tax digital for VAT

printer Mail

HMRC has now opened the making tax digital (MTD) pilot to most types of business, with the exception of those based overseas. It has also published a number of pieces of new and updated guidance for agents preparing for the start of MTD for VAT in April 2019.

A new step-by-step guide ( takes agents through the process of signing clients up to MTD for VAT, in sections headed:

  • talk to your clients;
  • get the right software;
  • create an agent services account;
  • link clients to your agent services account;
  • sign your clients up for making tax digital; and
  • authorise your software.

There are new guides for linking clients to an agent services account ( and for checking when MTD becomes mandatory for a business. This latter guide, Check when a business must follow the rules for making tax digital for VAT (, provides an up-to-date list of those businesses for whom the MTD rules are deferred until 1 October 2019, where they are:

  • part of a VAT group or VAT division;
  • based overseas;
  • trusts;
  • not-for-profit organisations not set up as a company;
  • submitting annual returns;
  • local authorities;
  • public corporations; or
  • using the VAT GIANT service.

Otherwise, most VAT registered businesses with a taxable turnover above £85,000 must follow the MTD rules from 1 April 2019.

The CIOT has reminded businesses not to sign up to submit the current period VAT return under MTD or the pilot until the return for the previous period has been submitted and has prepared an illustration of the staggered submission periods ( Once signed up, HMRC will expect all future VAT returns to be filed through MTD software. HMRC’s guidance indicates that taxpayers might have to wait for up to 72 hours for confirmation of sign-up before submitting a return. Businesses who pay by direct debit will not be able to sign up in the 15 working days before their submission date and the five working days immediately after it.

Another new guide, Apply for an agent services account if you are not based in the UK (, explains how agents must apply to HMRC for approval to create an agent services account, where they:

  • are based outside the UK;
  • want to access new HMRC online services; and
  • want to use software to communicate directly with HMRC on behalf of their clients.

HMRC says it will respond within 28 days if an application is approved.

Issue: 1431
Categories: News