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What you need to do for Making Tax Digital (MTD)

HMRC is changing the way you submit your VAT Returns. From April 2019, most VAT registered businesses with a turnover above £85,000 must keep their VAT records digitally and use Making Tax Digital compatible software to submit their VAT Returns.

Instead of waiting until then, you can get compatible software now and try this new way of submitting your returns so you’re ready when the changes come in. By signing up to HMRC’s secure service, you’re helping test a new way of working as part of the Making Tax Digital (MTD) pilot.

Who can use the MTD pilot?

You may qualify for the pilot if you are a sole trader, a partnership or currently submit the VAT Return for a limited company, and you:

  • use a standard accounting period
  • are up to date with your VAT

Once you have signed up to take part in the pilot, you’ll have to continue to use Making Tax Digital compatible software to submit your VAT returns.

You will not be able to take part in the pilot at the moment if you:

  • currently trade with, or have traded with the EU
  • are part of a VAT group or VAT division
  • are based overseas
  • are a trust
  • are a not for profit organisation that is not set up as a company
  • submit monthly or annual returns
  • make VAT payments on account
  • are a business that is newly registered for VAT and you have not previously used your VAT online account to submit your VAT Return

If you pay your VAT by Direct Debit you will not be able to sign up in the 15 working days leading up to your submission date and the 5 working days immediately after it.

This pilot will be opened to more businesses. Check back regularly to see if it has been extended to include you.

How it works

If you qualify you can choose ‘freeagent’ to activate the My Accountant Friend software.

Then you can:

  • sign up for the Making Tax Digital pilot
  • use software to keep your business records, prepare your next VAT Return, and submit it to HMRC

You can still choose to:

  • get your agent to submit your VAT Returns
  • view your next VAT Return deadline in your Business Tax Account

What do I need to sign up for the pilot?

You’ll need to have:

  • your Government Gateway user ID and password
  • your VAT registration number

You may also be asked to confirm your details.

What happens after I have signed up?

HMRC will send you a confirmation email within 72 hours of you signing up for this service.

Do not submit your VAT Return until you receive the email.

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