COVID -19 – UK Making Tax Digital for VAT soft landing deadline extended

Mar 30, 2020

Just as the end of the first soft landing period for Making Tax Digital approached later this week on 1 April 2020, HMRC have published the outcome of recent research and have just announced that  it is providing all MTD businesses with more time to put in place digital links between all parts of their functional compatible software. This means that all businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place.

According to the research, ‘the vast majority’ of businesses and agents have proved able to meet the requirements of the first phase of MTD. However, for a small number the transition has proved more challenging. HMRC recognises there is still more to do and intends to continue its engagement with agent professional bodies. We will continue to engage with HMRC on behalf of members. The message received from HMRC in respect of the research is set out below.

“Today the Government published a comprehensive evaluation of the rollout of Making Tax Digital for VAT. This responds to requests from stakeholders to review the roll-out of MTD for VAT before the government decides on the next phases of MTD. You can view our assessment here.

The evidence shows that the service is working well although acknowledges the expected technical teething issues that a service of this kind would be expected to face initially. It also details the steps we have taken collaboratively with customers and agents to resolve any issues promptly.

I’m proud of the progress we have made since MTD for VAT launched last year. There are now well around 1.4 million businesses signed up to the service, and over 4 million submissions have been received. This represents a significant milestone in the digitisation of the UK’s tax service. Over 265,000 businesses under the VAT turnover threshold have already joined voluntarily and are experiencing the benefits MTD has to offer.

More than £38.5 billion in payments have been made, and over £13 billion in repayments have been issued, through the MTD service.  94% of customers have filed through the MTD service on time so far. 

Alongside the MTD evaluation, the Government has also published eight MTD customer user research reports. The research, conducted over the last four years, provided valuable insight to help shape the design and delivery of MTD and is helping us to assess the success of MTD to date by investigating the wider impact on the working practices of those businesses who have made the switch. You can view the research reports here.

Of course, these are extremely difficult times for all of us and HMRC is committed to helping in every way possible all those businesses facing unprecedented challenges.”