Last week we reminded readers of HMRC’s plans to progress Making Tax Digital (“MTD”) for VAT by closing the online VAT portal for filing returns from 1 November 2022. HMRC has since contacted us to advise of a limited relaxation for businesses with turnover under £85,000. If such businesses have not signed up to MTD for VAT in time to file their next return by 7‌‌‌‌‌ ‌‌‌November 2022, they will still be able to use their existing VAT online account for that return only. Businesses that file annual VAT returns will still be able to use their VAT online account until 15‌‌‌‌‌‌ ‌‌May 2023.  Chartered Accountants Ireland, in discussions with HMRC about closure of the portal, expressed concern that businesses not signed up to MTD for VAT in time, would be unable to file their VAT return and pay any VAT due. This relaxation by HMRC for certain businesses is a helpful time limited compromise. Such businesses must sign up to MTD for VAT in order to file any returns due after‌‌‌ ‌‌1‌‌‌ ‌‌December 2022 if they file monthly or quarterly VAT returns, or they could face a penalty. Businesses with turnover over £85,000, who have been mandated to use MTD for VAT since 2019, and who are still not signed up will not be able to use the online VAT portal from 1 November 2022 and cannot avail of this relaxation. If a business is already exempt from filing VAT returns online or if they or their business are subject to an insolvency procedure, they are automatically exempt from MTD. Check if they can apply for an exemption sets out guidance on the exemption process. HMRC will consider each application on a case-by-case basis Last week, HMRC began to send emails to agents to let them know about the relaxation for returns due by certain businesses by 7 November 2022. HMRC will also be contacting these businesses directly by email on Wednesday 19 October. 

HMRC’s latest schedule of webinars is now available for booking. Spaces are limited, so take a look now and save your place. HMRC has also made available a YouTube video which contains an overview of how to report COVID-19 support payments and grants on Company Tax Returns, what happens if you’ve claimed too much and the records that must be kept.  If you have any questions, please send them to email HMRC prior to the webinar, including the title of the webinar in the ‘Subject’ line of your email. HMRC will answer as many questions as possible on the day. Making Tax Digital for VAT: register here This webinar will provide some of the basics of Making Tax Digital for VAT. This includes what has changed, using software and keeping digital records, plus an introduction to penalty reform. From April 2022, these requirements apply to all VAT-registered businesses, including those with turnover below the £85,000 VAT registration threshold. How to register for VAT using the VAT1 form: register here This webinar will explain how to register for VAT using the VAT1 form and will also focus on the most common errors made when completing this form with tips provided on how to avoid mistakes. Using VAT484 form to report changes: register here This webinar will explain how to complete form VAT484 to report any changes to your client‘s VAT registered business. This includes changing business contact details, VAT return dates, business partners and cancelling VAT registration. Capital allowances and vehicles: register here This webinar will cover the rules for cars, qualifying expenditure, pools and rates and vehicle hire purchase. Trade losses: register here This webinar will explain how trade losses can be relieved and will provide examples of the different loss relief provisions, time limits applicable to each claim and further points to consider. Income from property for individual landlords – part 1: register here This webinar will look at restricting finance cost relief and the cash basis eligibility and computational rules for property income. Income from property for individual landlords – part 2: register here This webinar will examine some of the main expenses and deductions including the treatment of capital expenditure, repairs and the property allowance for property income.

This update brings news of Making Tax Digital (“MTD”) for VAT and specifically HMRC communications ahead of the closure of the online VAT portal from 1 November. An update on the MTD for income tax trial is also provided. MTD for VAT As planned, the online VAT portal for submitting VAT returns is due to close from 1 November 2022 to ensure those required to sign up to MTD for VAT do so. Earlier this month, HMRC issued letters to those still not signed up. This is to be followed up later this month with direct emails to taxpayers. An email will also be sent to appointed agents from the beginning of November setting out information on what happens next and how to support clients from 1 November. Last week HMRC issued a Press Release highlighting the closure of the online VAT portal from 1 November and the requirement to sign up to MTD for VAT. MTD for income tax MTD for income tax is due to commence from 1 April 2024. At present, the pilot remains at Stage 1 (handholding and entry route via software developers only) while some technical issues are reviewed. There are currently 97 participants in the pilot with participation limited to those with an accounting period ending 5 April. Chartered Accountants Ireland and the other Professional Bodies have expressed their concerns to HMRC about MTD for income tax and will continue to do so.