HMRC is reminding agents and taxpayers who file annual returns that the online portal for filing VAT returns is closing on 15 May.

Existing transition arrangements will end on this date and any businesses still using the old system will be automatically signed up for a Making Tax Digital (MTD) for VAT account.

As the portal closed for quarterly filers in November 2022, this means that all VAT-registered businesses will need to use MTD-compatible software to keep their records and submit their returns from 15 May.

Exemptions to MTD for VAT can be made under certain circumstances, and HMRC will review each application on a case-by-case basis.

HMRC says businesses should sign up for compatible software as soon as possible to avoid non-compliance penalties.

According to the tax authority, the new system will help reduce common mistakes on VAT returns. HMRC chief Jim Harra continued:

"To make it quicker and easier for businesses to manage their tax affairs, we'll sign up all remaining businesses to MTD, unless your client is exempt or has applied for exemption and is awaiting a response from us."

HMRC also encourage businesses to reach out to their accountants to support their move to compatible software.

Contact us to find out more about MTD for VAT.