From 1 November 2022, HMRC has announced that its online VAT return portal will close to the majority of VAT registered businesses who should be using Making Tax Digital (“MTD”) for VAT. HMRC has also now published more detailed guidance on MTD for income tax as recommended by Chartered Accountants Ireland in its response to the recent consultation on the MTD for income tax tertiary legislation.

Closure of online VAT return portal

From 1 November 2022, businesses and agents will only be able to file VAT returns using MTD for VAT compatible software. Businesses will no longer be able to use their existing VAT online account to file their quarterly or monthly VAT returns. However, the online VAT return will remain available to those with a digital exclusion exemption and businesses that file annual returns will still be able to use their VAT online account until 15 May 2023.

VAT registered businesses must sign up to MTD for VAT and use MTD for VAT compatible software to keep their VAT records and file their VAT returns. From 24 August 2022, HMRC began contacting businesses that still need to sign up.

If a business hasn’t signed up to MTD and started using compatible software already, they must follow these steps:-

Step 1 - choose MTD-compatible software that’s right for your business – you can find a list of software  on GOV.‌‌‌UK. Chartered Accountants Ireland recommends you discuss this with a Chartered Accountant.

Step 2 - check the permissions in your software – once you’ve allowed it to work with MTD, you can file VAT returns.

Step 3 - keep digital records for current and future VAT returns.

Step 4 - sign up for MTD and file future VAT returns using MTD-compatible software.

MTD for income tax detailed guidance

HMRC has now published more detailed MTD for income tax guidance in the following publications:-

• Check if you can sign up for MTD for Income Tax;
• Check when to sign up for MTD for Income Tax;
• Using MTD for income tax; and
• Sign up as an individual for Making Tax Digital for Income Tax.