Vale & West Chartered Accountants Blog

First MTD-compatible VAT returns filed

Although the first Making Tax Digital (MTD) for VAT filing deadline passed without too many problems on 7 May, the biggest test will come on 7 August, when the largest wave of the 1.1 million VAT registered businesses in the UK have to file under the new system for the first time.

However, of these businesses, up to 300,000 have not yet registered with HM Revenue & Customs (HMRC) and if they have not registered, they will be unable to file on the new digital filing platform.

Moreover, as the Government launched MTD a while ago, it is now concerned about the pace of registrations slackening and businesses failing to submit their return on time.

In addition to this fear, the May filings exposed some weaknesses in the technology, which mean that some taxpayers have been receiving inaccurate data from HMRC through their MTD-compliant software.

HMRC has already undertaken one planned outage of the system, with two more planned this month to fix any known errors. However, if these do not do the trick, there could be big problems when the largest wave of filers hits in August. This could potentially magnify problems, as MTD helplines were already at capacity in May, with many users reporting a two-hour wait to get their queries answered.

Furthermore, during all the ‘excitement’ of making digital tax returns, businesses need to be mindful that they still have to keep records, such as their business name, address, VAT registration number, their VAT account details and any transaction data.

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