Businesses urged to comply with new tax laws as deadline looms

Just over 600,000 of the 1.2 million businesses who are affected by the new MTD rules have so far signed up and around 10,000 are doing so each day, HM Revenue and Customs (HMRC) said.

The MTD rules, which became law for VAT periods starting on or after 1 April, require businesses to keep their records digitally and submit their VAT returns using MTD-compatible software.

Many businesses will be required to submit their first quarterly VAT return to HMRC using MTD-compliant software by 7 August.

If paying by Direct Debit, these businesses must register by Monday 29 July.

Small business without accountants or the correct software can choose from over 220 compatible software products from at a range of prices, including free ones here

Theresa Middleton, director of MTD at HMRC urged those with an August quarterly filing deadline to sign up now, but reassured businesses that it wouldn’t be issuing filing or record keeping penalties to businesses “doing their best to comply,” during the first year.

Businesses can sign up for MTD here

If paying by Direct Debit, businesses should register at least seven working days before a return is due.

If not paying by Direct Debit, businesses can register at least 72 hours (three days) before their return is due.

Businesses are also warned to ensure that their last pre-MTD Direct Debit has come out of their bank accounts before signing up.

No business will be forced to go digital for their VAT returns if they are unable to, Middleton added.

“Anyone who is already exempt from online filing of VAT remains so under MTD and there is further provision for those who cannot adapt to the new service due to factors such as age, disability, or location to apply for an exemption,” she said.

Businesses that are registered for VAT but are below the VAT threshold are also not required to use the MTD service, but can choose to do so.