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Business MTD sign-ups pass million mark

The number of businesses that have signed up to MTD for VAT passed the 1m milestone by 7 August, ICAEW Tax Faculty reports, but 120,000 missed the deadline, amid claims of direct debit failures and incorrect VAT return obligation periods.

"VAT"

September 2019

Almost 90% of monthly filers and 76% of stagger group 1 quarterly filers signed up to MTD for VAT by the 7 August 2019 filing deadline. This means that approximately 5,000 monthly filers and 116,000 stagger group 1 quarterly filers had not signed up in time to meet the August deadline.

The ICAEW Tax Faculty understands that approximately 200,000 businesses with turnover below the VAT threshold have signed up to MTD for VAT, alongside 40,000 monthly filers, 370,000 stagger group 1 quarterly filers and 303,000 stagger group 2 and 3 businesses that have signed up early. The total number of businesses within the scope of mandatory MTD is approximately 1.2m.

The limited statistics released by HMRC do not enable a full assessment of how many of these businesses have successfully filed their returns, but the number of returns filed now exceeds 900,000.

Reports from members indicate that there are continuing issues including direct debit payments not being collected, incorrect VAT return obligation periods and overseas businesses being unable to sign up. Design issues including the lack of filing reminder and confirmation emails and with the agent services account continue to cause difficulty.

In a statement, Theresa Middleton, HMRC Director of the MTD Programme, said: “Our focus during this period has been to support businesses moving to MTD to get it right, not to unnecessarily penalise businesses who are doing their best to make the transition.

She added that a small proportion of customers experienced issues when trying to meet their obligations and that she was sorry for the frustration and worry this may have caused. “We will continue to improve the service so that in future every customer is able to experience the smooth process that was enjoyed by the majority,” she said.

The Tax Faculty would welcome feedback from members on the transition to MTD, in particular any specific feedback on costs and benefits. Please email caroline.miskin@icaew.com.

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