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MTD Optimum Time To Sign Up Clients???

What is the best time to sign clients up for MTD

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I'm sure this has been discussed numberous times but I have just come up against ANOTHER hiccup when signing up clients for MTD. 

I have been signing up my clients ASAP after the last VAT return has been submitted so, if I have submitted the VAT return for quarter ended 31.05.19, I've been registering the client for MTD where required. Doing so earlier presumably will presumably stop me from submitted returns on the "old" system.

The problem I have encountered is that, in doing so, HMRC seem to be temporarily suspending the direct debit instruction so the VAT goes un-collected and VAT default surcharge is incurred. The relevant dates in the last case were, VAT return (qtr ended 30.04.19) submitted 09.05.19, client registered for MTD on 15.05.19, confirmation email from HMRC that MTD registration successfully completed 17.05.19, VAT direct debit not collected on 10.06.19, called VAT helpline today and they confirmed direct debit for MTD is in place. 

Is this a problem anyone else has encountered and what is the concensus on the best time to register a client for MTD? I am finding the process pretty frustrating!

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By Wanderer
18th Jun 2019 10:48

This problem has been discussed on here a few times before.

We have been advising all our clients that the best time is shortly after the VAT payment has cleared for the last return under the old method. This helps ensure that there are no problems with the old method and gives plenty of time to set up / sort out any problems with the new method.

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By johnhemming
18th Jun 2019 10:56

You should wait at least a week after the filing date (the filing date is not the date that you file, but the last date for filing).

Hence for quarter ended 30/4 the filing date is something like 7th June. You should not register for MTD before 14th June.

They say: Businesses that currently pay VAT by Direct Debit cannot sign up in the 7 working days leading up to, or the 5 working days after their VAT Return is due.

On this page:
https://www.gov.uk/guidance/sign-up-for-making-tax-digital-for-vat

When you submit a return and then join MTD before the direct debit is taken as I understand it the DD is moved to MTD and cancelled for the portal. If this happens before the DD is taken it isn't taken.

You could argue against a penalty on the basis that the words on the page above are not clear.

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Replying to johnhemming:
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By Wanderer
18th Jun 2019 11:06

johnhemming wrote:

They say: Businesses that currently pay VAT by Direct Debit cannot sign up in the 7 working days leading up to, or the 5 working days after their VAT Return is due.

Problem is you can though!
If this was a commercial product with proper coders it would take about 5 minutes to error trap this and prevent sign up in this period.
Unfortunately we are dealing with one of many poorly designed and implemented Government systems.
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Replying to Wanderer:
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By johnhemming
18th Jun 2019 11:20

It may be that they have blocked what is in the phrase above, but they have not (AFAIK) blocked situations where someone submits a vat return and then changes to MTD before the DD is taken.

I think this is one of those situations where someone codes to specification, but the specification is wrong.

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By pauld
18th Jun 2019 11:02

I think you should have waited until the DD had been collected for the April Vat Return. There has been lots guidance from various bodies on this as I believe others too have experienced this issue when registering at the wrong time. Hopefully someone will post the solution for you.

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By johnny fartpants
18th Jun 2019 11:38

Thanks everyone. Really helpful to know (and not advice readily available from HMRC). I'll defer my future registrations as recommended.

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By 2003bluecat
18th Jun 2019 14:11

We were sent some reasonably useful guides from HMRC called Agent Updates. I've found the final one here which shows that for monthly filers with a DD payment in place you should wait until between the 18th and the 25th of the month (which presumably one could extrapolate to mean quarterly filers should sign up between 18th of the month in which the last VAT return was due and the 25th of the month immediately before the next VAT return is due).

Don't ask me how we signed up for these emails though, or even why it does not seem to be available on the HMRC website.

https://www.att.org.uk/sites/default/files/Making%20Tax%20Digital%20Upda...

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