Share this content
0
772

Anyone received one of these?

HMRC Letter re signing up for MTD for VAT

Didn't find your answer?

Search AccountingWEB

One of my clients has just received a letter from HMRC pointing out that they did not register for MTD for VAT by the required date and have therefore missed filing their first return under the new regime. This client has just ceased trading and we took the view that it was unnecessary to register since their annual turnover was going to be below the threshold.  The letter implies that they mistakenly missed the date but, if they haven’t registered by the time their next return is due, it will be considered that they deliberately failed to register. There is no indication as to the penalty for not registering and, of course, no return address, no telephone number or email address to enable contact to explain the circumstances. 

Has anyone else received this letter yet and, if so, how do you intend to respond to it - or will you ignore it?

I have several clients who are below the taxable threshold who haven’t signed up for MTD so I image that this is the first letter of many!  Since HMRC have no means of ascertaining the businesses taxable income from the figures in the nine boxes I wonder whether this is the first stage in making ALL VAT registered businesses sign up for MTD?

The letter is from Rebecca Hutton - the “Head Of External Stakeholder Engagement”  - it’s good to know that all us customers have a stake in this!!

 

 

Replies (10)

Please login or register to join the discussion.

Stepurhan
By stepurhan
23rd Aug 2019 14:15

One of our clients had such a letter. Not registered because they were below the threshold.

Also HMRC do have a way of checking if some businesses are below the limit. Add the Box 6 figures together for the last four returns. If this figure is below £85,000 then they know the client is not required to file. Could have saved a lot letters with a simple calculation.

Thanks (1)
Replying to stepurhan:
avatar
By johnhemming
23rd Aug 2019 14:20

HMRC get a reasonable stab at the turnover figures from this, but there are variations such as for Flat Rate where Box 6 is gross rather than net.

Thanks (0)
Replying to johnhemming:
Stepurhan
By stepurhan
23rd Aug 2019 16:38

Which is why I specifically focussed on returns where the four Box 6 figures add up to less than £85,000.

Can you think of a single circumstance (excepting an incorrectly completed return) where that exercise would identify someone as not required to register for MTD in error?

Thanks (0)
Replying to stepurhan:
avatar
By johnhemming
23rd Aug 2019 18:23

I think you are essentially right although I think that there is an exception where people are expecting to exceed the threshold in the next month. There probably are not many of those.

I did have a discussion with the technical people are HMRC about this and they were of the view that it would be difficult to be precise about which side of the line people who are close to it would be.

I would have thought, however, that they would have avoided chasing some tax payers.

Thanks (0)
Replying to johnhemming:
A Putey FACA
By Arthur Putey
24th Aug 2019 10:22

If you have significant exports, or exempt supplies, your box 6 figure will be higher, but your (UK) taxable turnover could well be below the VAT registration threshold.

Thanks (1)
Replying to stepurhan:
avatar
By dl100tr
23rd Aug 2019 17:54

This isn't the case though is it? According to VAT Notice 700/12 you should include exempt supplies and outside the scope supplies so, depending on your business, it's not quite as simple as adding up the four quarters.

Thanks (0)
Replying to dl100tr:
Stepurhan
By stepurhan
27th Aug 2019 08:54

johnhemming wrote:

I think you are essentially right although I think that there is an exception where people are expecting to exceed the threshold in the next month. There probably are not many of those.


That is relevant for businesses having to register for VAT. Is it relevant for MTD, which only referred to historical turnover?
dl100tr wrote:

This isn't the case though is it? According to VAT Notice 700/12 you should include exempt supplies and outside the scope supplies so, depending on your business, it's not quite as simple as adding up the four quarters.

Creating a figure above £85,000? So not a figure below £85,000?

So it appears you too have not read what I actually said. Again, in what situation would four box 6 figures adding up to a figure BELOW £85,000 falsely indicate someone did not have to register for MTD.

Thanks (0)
Replying to stepurhan:
avatar
By dl100tr
28th Aug 2019 15:53

Apologies - I did misunderstand your comment. Clearly you are correct that a simple calculation would show that a VAT registered business was not obliged to sign up for MTD if the total of box 6 over four quarters was below £85,000 - so we are in agreement that they could have saved themselves a lot of letters.

Thanks (0)
avatar
By carnmores
23rd Aug 2019 15:11

Yes i've had one for a client its usual. they filed their recent VAT return as they had before

Thanks (0)
avatar
By johnhemming
24th Aug 2019 13:51

I do have a few clients who are submitting MTD VAT returns even though they are not required to. Then again it does not cost them anything .

Thanks (0)
Share this content