Under Making Tax Digital for VAT (MTDfV) you won’t be able to submit returns using HMRC’s existing system, known as the portal site.
HMRC isn’t actually pulling the plug on the portal site completely. It will stay open for businesses that aren’t going into Making Tax Digital (MTD), e.g. voluntary registrations. Therefore businesses in MTD will be shut out. Once you go into MTD for VAT (MTDfV), whether it’s for the pilot or for real, your records be transferred to the new computer system and the old one won’t recognise you any more. HMRC has already realised one problem with this “Pilot trap” – It’s possible to sign up to the pilot and still file one last return via the portal site.
While HMRC’s systems wave red flags at you telling you shouldn’t do it, you can if you answer “yes” to everything. Trap. If you submit a return via the portal site after signing up for MTD, it will disappear from HMRC’s system, which could land you in hot water.
To avoid the pilot trap, before you sign up to the pilot there are four things you should do in this order:
- have MTD-compatible software in place;
- file your final return using the portal;
- sign up for MTDfV and wait for the confirmation e-mail from HMRC – this should take no more than 72 hours; and
- make sure you’re ready to submit your VAT figures using your software next time.
If you’re in MTDfV and need to correct a previous return, including one under the old system, the process is simple. If the amount of VAT involved is no more than £10,000, you can amend the entries in your software so that it’s included in your next MTD submission. If the error is for more than £10,000, you must report it in writing to HMRC and not make any adjustments to the VAT records in your software
Article and images by Dan Carey
This article is purely journalistic and is published for information only. You should take professional advice on all matters relating to tax and VAT.