All VAT registered traders must comply with Making Tax Digital VAT (MTD VAT) regulations from the beginning of their first VAT accounting period starting on or after 1 April 2022. About 750,000 traders need to sign up, including about 100,000 who should have been complying since 2019. Those that are unable to comply can apply for a digital exclusion exemption.

Signing up to MTD VAT

HMRC has published a helpful guide which explains how to work out the start date for different accounting periods.

The guidance also highlights the sweet spot for signing up, between the last non-MTD VAT return being filed and the first MTD VAT return being due.

Those that pay by direct debit must sign up at least:

• seven days before their first MTD return is due; and
• five days after their last non-MTD return is due.

The system is more flexible for those that do not pay by direct debit who need to sign up at least three days before their first MTD return is due.

Further information

HMRC has also updated the following guidance to reflect the extension of the MTD requirements to all VAT registered businesses:

• VAT Notice 700/22: Making Tax Digital for VAT
• Making Tax Digital for VAT as an agent: step by step
• Manage your client's details for Making Tax Digital for VAT
• Sign up your client for Making Tax Digital for VAT

Guidance is also available from ICAEW’s MTD hub:

• MTD and VAT - Making Tax Digital
• MTD for VAT penalties