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New business and mtd vat signup

New business and mtd vat signup

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I have a client who is  a new business (i.e. not a TOGC) and they have voluntarily registered for VAT w.e.f. 1st May 2019.

My question is when should my client sign up to MTD?

My understanding was, wait until rolling 12 month turnover reached the VAT threshold and transfer from Gov Gateway to MTD.

 

I spoke to the VAT Helpine and they have told me otherwise, to paraphrase ...

If on the VAT registration form you estimated your taxable turnover to be over £85,000, even if it actually turns out to be lower in hindsight, your client must file VAT returns under MTD. If however, after 12 months their turnover is under £85,000 pa, they can request to opt out of MTD.

On the VAT registration the client has estimated their VAT turnover to be say, £100,000.

The advisor's reasoning was that the VAT registration form is a document which has force of law.

 

What do my learned fellow advisors think, please?

 

 

Replies (7)

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By John Charman
17th Jul 2019 20:40

The only info I can provide you with is that it is the businesses job to register for MTD when it exceeds the 85k, rather than HMRC tell the business. I have a feeling in the early stages the regulation on this will probably be quite loose.

However, if you are concerned then why not just sign them up straight away? It’s a 5 minute job if you have your ASA set up and have the appropriate 64-8 in place

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By SXGuy
17th Jul 2019 21:22

The bit I love is hmrc advising the client can opt out. As far as I know once your in your in. There's no opt out. Which suggests to me they don't have a scooby about what they are talking about. If it were me I'd prob wait till threshold is reached then switch over.

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By johnhemming
18th Jul 2019 02:49

A month or so ago HMRC said the online facility to opt out would be available in August. That could, of course, slip.

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By MECtax
18th Jul 2019 00:59

I thought all new registrations after 01/04/19 had to join MTD immediately regardless of turnover?

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Replying to MECtax:
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By johnhemming
18th Jul 2019 02:50

I don't think that is true. What I think will happen is that there will be a facility to submit online via a portal equivalent that goes into the MTD databases so that they can switch off the old portal at some stage.

The new facility I think is also an August thingy.

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By ireallyshouldknowthisbut
18th Jul 2019 08:57

Given you cant set up a DD in MTD, I wold suggest filing the first one under the old system regardless, just to get that working, then flip it over.

Or the client will have to prat about themselves setting up a DD or pay via bank transfer.

What are HMRC going to do about it exactly? They have no real powers on this other than winging a bit.

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By rockallj
25th Jul 2019 11:16

Thanks for the replies.

As it happens, the first VAT period was the month of May only. I didn’t have enough time to sign the client up for MTD even if I wanted to! So filed under the GG.

I’m going to take the view of entering MTD when they reach the mandatory rolling 12 month threshold.

This will give time for client to improve their record keeping and we decide the software vs. spreadsheet debate before MTD applies.

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