If you’re unaware of what MTD is, then we wrote a more in-depth article here.
When to register
Any VAT registered business can register for MTD now but if you want to know when your first mandatory MTD return is all you need to know is your turnover level and your VAT quarters*.
· If your turnover is more than £85,000 a year, then MTD will be mandatory in 2019:
If your VAT quarters end Mar/Jun/Sep/Dec, your first mandatory MTD VAT return will be for the period between 01/04/19 to 30/06/19;
If your VAT quarters end Mar/Jun/Sep/Dec, your first mandatory MTD VAT return will be for the period between 01/05/19 to 31/07/19;
If your VAT quarters end Mar/Jun/Sep/Dec, your first mandatory MTD VAT return will be for the period between 01/06/19 to 31/08/19.
· If your turnover is less than £85,000 a year, then MTD will be mandatory in 2020:
If your VAT quarters end Mar/Jun/Sep/Dec, your first mandatory MTD VAT return will be for the period between 01/04/20 to 30/06/20;
If your VAT quarters end Mar/Jun/Sep/Dec, your first mandatory MTD VAT return will be for the period between 01/05/20 to 31/07/20;
If your VAT quarters end Mar/Jun/Sep/Dec, your first mandatory MTD VAT return will be for the period between 01/06/20 to 31/08/20.
*There are some rare circumstances where you might need to switch to MTD at a different time but this is very unlikely. Your accountant should make you aware of any such circumstances.
Once you’ve registered for MTD, you can’t go back so it’s best to register just after filing your final non-MTD VAT return to have as much time as possible to resolve any potential issues.
Registering for MTD with HMRC
When you’re ready to register, have your VAT number, government gateway ID and government gateway password to hand then head to the HMRC MTD sign up page.
You’ll be asked a few straight forward questions about your business and you’ll have to authorise an email address to allow HMRC to email you about your VAT. Once you’ve done this you should get to a screen that tells you that they have received your information (as we’re still in the early stages, the interface could change so the final message may vary).
You’ll then receive an email within 72 hours to confirm that you can submit returns using software that’s compatible with MTD for VAT.
Turning on MTD filing within FreeAgent
Once you’re registered you’ll either have to find some MTD software or activate your current software so that you can submit an MTD VAT return. This process will vary depending on what software you decide to use but the process for FreeAgent users is as follows:
Log into FreeAgent and navigate to settings (settings is found by clicking your business name in the top right-hand corner of the screen to open the drop-down menu);
Scroll down to the ‘Integrations’ section and select ‘HMRC connections’;
There will then be a big green button to ‘Connect FreeAgent to HMRC’;
You'll be redirected to the HMRC site to complete the connection process, select ‘continue’ and fill in your Government Gateway credentials;
If everything has worked, you should see a screen that says ‘FreeAgent can now connect to HMRC. Mission accomplished!’ (this connection will need to be renewed every 18 months);
From here our first MTD VAT return should be almost the same process as pre-MTD returns except for a small checkbox that will need to be ticked before you click the ‘File online with HMRC’ button.
If you’d like any more information, feel free to contact us.