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HMRC to transfer remaining businesses to MTD VAT

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Published: 22 Nov 2022 Update History

The online VAT return is now closed to most businesses. Businesses that have not yet signed up to MTD VAT will be automatically transferred.
HMRC has now closed the online VAT return to all businesses, except annual filers and those with an agreed digital exclusion exemption.

The next step is for HMRC to automatically sign-up businesses to MTD VAT that have not done so themselves. Businesses that are exempt, or have applied for exemption, should not be transferred across. HMRC intends to remove the functionality to sign up to MTD VAT from gov.uk on 24 November 2022.

There is a risk that HMRC will sign-up businesses that have agreed an exemption or applied for one. Businesses in this situation will need to contact HMRC to request that the online VAT return be switched back on.

ICAEW’s Tax Faculty says: “The fact that most businesses are no longer able to use the online VAT return to file monthly or quarterly VAT returns may come as a surprise to many. Businesses that have not made arrangements to file their VAT returns using MTD compatible software need to take urgent action or apply for digital exclusion exemption.”

The online VAT return’s closure follows the completed transfer of taxpayers’ VAT records from the VAT Mainframe (VMF) to the newer Enterprise Tax Management Platform (ETMP) – with a few exceptions. It also marks the end of the MTD VAT project team, with their responsibilities now transferred to VAT operations.

As businesses should now be using MTD for all VAT as standard, the terminology across HMRC guidance will gradually be changing from “MTD VAT” to “VAT”. This will start with the Agent Services Account.
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