Changes to the VAT online account

From Monday 15 May 2023, unless you are already using Making Tax Digital (MTD)
compatible software, you will no longer be able to use your existing VAT online
account to file manual VAT returns. That is because by law, all VAT-registered
businesses must now use Making Tax Digital (MTD) compatible software to keep
their VAT records and file their VAT returns.

What businesses need to do now to avoid a penalty
  • Step 1. Choose MTD-compatible software that’s right for your business – talk to us immediately!
  • Step 2. Check the software permissions to allow it to work with MTD. Go to GOV.UK and search 'manage permissions for tax software; for information on how to do this.
  • Step 3. Keep digital records for current and future VAT returns – more information about what records must be kept digitally is on GOV.UK.
  • Step 4. File your future VAT returns on time using MTD-compatible software. You can find out how to submit your VAT returns on GOV.UK.

You may receive a penalty if you don’t file on time via compatible software. For VAT accounting periods starting on or after 1 January 2023 HMRC introduced new penalties for VAT returns that are submitted late and VAT which is paid late. The way interest is charged has also changed.

At James Anderson + Co, we specialise in assisting our clients with Making Tax Digital. If you believe your company needs advice on MTD, we invite you to reach out to us via our contact page or by calling 0131 440 1373. We are more than delighted to lend a hand!

For more information about new VAT penalties, you can visit GOV.UK or watch a recorded webinar specifically designed for businesses.