Thousands of small businesses have yet to sign up to the government’s new Making Tax Digital (MTD) scheme which comes into force on April 1.


Almost 1.2 billion businesses will need to comply with the new legislation, which requires those with a taxable turnover above the VAT threshold of £85,000 to keep their records digitally and submit their VAT returns using MTD-compatible software.

More than 70,000 businesses have now signed up and more than 3,000 are signing up a day, but with just days to go, many thousands have yet to do so, HM Revenue and Customs (HMRC) said.

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.

Businesses are required to join MTD and submit their VAT returns using the new service for their first VAT period which begins on or after 1 April.

For the majority, who file quarterly, their first MTD returns won’t be due until August or later.

However, businesses will need to have signed up to the service, begun keeping their records digitally and set up their MTD compliant software to send information to MTD, in good time before they file their first return under MTD, HMRC warned.