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MTD for VAT: new registration two-step process confirmed

Are you wondering how Making Tax Digital (MTD) for VAT works for new VAT registrations? ICAEW’s Tax Faculty has confirmed with HMRC that a business cannot sign up to MTD until the VAT registration is complete

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June 2019

The process for registering for VAT is unchanged. A business that needs to (or chooses to) register for VAT for the first time should follow the current process to register for VAT and the VAT registration guidance on gov.uk.

If the taxable turnover of the business in the previous 12 months is over the VAT registration threshold of £85,000 the business will also need to comply with the MTD for VAT requirements. This includes following the steps to sign up to MTD for VAT as explained in the ICAEW guidance for businesses and agents and in recent Tax Faculty webinars (free to all ICAEW members).

Having to complete two separate processes, registering for VAT and then signing up to MTD for VAT, has the potential to cause delay and difficulty. A business cannot sign up to MTD until the VAT registration is complete.

The Tax Faculty understands that HMRC is developing functionality that will allow businesses to register for VAT and sign up to MTD in a single, combined process but there is currently no timetable for when such a service will be introduced.

If you have any feedback on MTD for new VAT registrations please email: caroline.miskin@icaew

This article first appeared in the ICAEW TAXwire

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