Joining the HMRC MTD VAT pilot scheme

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So, HMRC now have a live pilot scheme that some businesses can join.  Exactly what proportion of businesses is unclear.  I personally manage two VAT registered legal entities, the company the board of which I chair has a third VAT account, but I don't personally handle the VAT for that business (JHC Systems Ltd) although I used to in the 1980s.  One of my businesses is in the pilot scheme and the other one is not.

Lots of people have asked about what the differences are and I thought, therefore, that I would do a video.  That video is on youtube here:

If a business is interested in taking part in the pilot scheme there are a few things that should be thought about.  Some of these I mention in the video.   

The first thing is that businesses should aim to sign up to the pilot scheme before picking a software provider.  There are plenty of software providers and many of them are offering free services during the pilot period (my business is).  Until they get really busy it is worth trying to get on board whilst things are still relatively quiet.  There is no sense trying to sort out which software provider you are using if in fact you do not qualify for the pilot scheme.  At this stage if a business has signed up to the pilot scheme they will be at least able to find a bridging provider to enable them to submit their return.

Secondly, it is possible to find out whether or not you can sign up to the pilot scheme without being committed.   Although the button on the HRMC website says "Sign up" you can in fact bail out after you find out whether or not you can sign up.  If you watch my video you will see how a business that is not able to sign up to the scheme is told so at quite an early stage.   That happens after the point at which the HMRC website asks whether or not you are handling more than one vat account - presumably on the same gateway number.  I have my two vat numbers on different gateway accounts and many other people do things the same way.

Thirdly, be careful if you pay by direct debit.  If you pay by direct debit you have to sign up about 17 working days before the filing date (the last date upon which you can file the VAT return).  The easiest approach is to sign up as early as possible (but not if you are doing monthly submissions).

Finally, at the moment companies doing monthly repayment submissions cannot join the pilot although they should be able to do so soon.  However, if the accounts are registered for direct debits then there is only a small window after the filing deadline in each month during which they can sign up to the pilot.  The difficulty is that for the start of the month they are less than 15 working days plus 24 hours in front of the filing deadline.  Then for a few days after that they can sign up until again they are less than 15 working days plus 24 hours in front of the next filing deadline.

I recognise the challenge that HMRC faces in getting 1.1 Million companies to transfer to MTD.   There are technical difficulties which have led to some of the issues I have mentioned above.   My recommendation remains to sign up to the pilot scheme as early as people can.  Even if your company uses a product which can do a direct submission you can still use bridging software as long as you are not retyping anything.  None of the process is that difficult, but I am always one to recommend avoiding the rush.





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