So, you missed the first major digital VAT deadline of 7 August.
Whatever the reason you didn’t make it over the finish line, you may be wondering and worrying about the consequences for you and your client.
Yes, HMRC has promised a light touch approach to enforcing the new MTD rules to begin with. But does that mean your client will definitely escape without a fine? And what do you have to do next?
Turns out, all that agents and their business clients need to do if they have missed the deadline is to file the old way.
The previously used portal still exists because not every organisation is above the £85,000 income threshold required for the first phase of MTD for VAT.
That’s where latecomers must go to complete their VAT filing for the first quarter.
HMRC’s latest message
We learnt about this thanks to an email from HMRC’s MTD for Business Customer Readiness & External Stakeholder Team to tax agents.
This reminded businesses who pay by direct debit that the sign-up window has closed for the 7 August but stated: “Do not worry, we won’t penalise them (businesses) this time, so file the old way and come back when the DD has been collected to sign up in time to file the next return.
“Although we will not penalise them (businesses), they will receive a letter from us telling them that they missed the deadline and asking them to take action.”
So, agents and businesses who have been frantically trying to get over the finish line for the first digital VAT submission but have just fallen short can breathe a sigh of relief.
Complacency is the enemy
While this is good news, it comes with a health warning regarding the potential for complacency.
If you have clients who were among those who failed to make the cut, you could think ‘why bother rushing then?’ to get signed up in time for the next deadline.
Although HMRC has stated for a while it will operate a soft landing to start with, it has also stressed that it will not penalise those businesses who are doing their best to comply. The latter part of that sentence being key. So, simply taking no action, being lazy or complacent won’t cut it.
A long term solution
And the best way to get fully on board with MTD for VAT and not worry anymore about compliance? It’s online bookkeeping software that is MTD compatible, capable of communicating with HMRC in the required way.
We would suggest looking at KashFlow, which entirely meets the MTD for VAT requirements, ensuring they have everything in place for future so they never miss an MTD for VAT deadline. It enables they to:
Keep and preserve digital records
Create a VAT return from these digital records
Communicate and link up directly with HMRC, meaning their data goes straight to the right place every time
Reduce the time spent searching through files by keeping their books structured, simple and in one place
What’s the alternative?
We realise bookkeeping software is not always the right solution for all accountants. Alternatively, consider Keytime VAT Filer, our bridging software solution, which can bring you up to speed in the short term.
Keytime VAT Filer automatically connects to HMRC allowing the you to import VAT data from various sources and submit directly to HMRC. While also retrieving client data such as previous submissions made under MTD, current VAT obligations, liabilities due and payments already made. Making your clients’ submissions much more straightforward. Keytime VAT Filer is integrated with Keytime Practice Manager and so works with your existing client records.
In summary, businesses may escape unscathed from a missed deadline this time around but that won’t be the case for long. So, why not get your digital VAT solution in place sooner, rather than later, to avoid further headaches and stress about the next big deadline when it comes around.
Want to learn more about the MTD solutions that Keytime can provide? Email [email protected] and one of the team will be happy to call you.