How you can sign up your clients to Making Tax Digital
If they haven’t already, it’s likely you’ll soon have clients banging on your door to help get them ready for Making Tax Digital (MTD).
VAT-registered businesses with an annual taxable turnover of £85,000 and over should already be signed up to MTD and be submitting VAT returns to HMRC using MTD compatible software, unless exempt.
However, just because they should be signed up doesn’t necessarily mean they are – small businesses have plenty on their plates, and the drive to digitise tax may have fallen by the wayside.
Meanwhile, the date for the next stage of MTD has been set – by April 2024, self-employed people and landlords with turnover above £10,000 must use MTD-compatible software to comply with MTD for ITSA.
Here, we offer a quick recap of what’s required from you to get your clients ready for MTD.
Where to start
As for MTD for ITSA, clients must sign up via compatible software, and you can only do this on their behalf if they're already registered for self assessment. HMRC’s handy guide for signing up for MTD for ITSA has more information on this process.
How to sign up a client to MTD for VAT
To sign up for MTD for VAT on behalf of a client, you’ll need both MTD compatible software and an agent services account. Then, you’ll need the following information from your client:
- Their contact details (including business email address)
- Business entity type (not required if it’s an overseas business that doesn’t have a UK establishment)
- Their VAT certificate
Once you’ve signed up your client, you’ll receive a confirmation email from HMRC within 72 hours. Then, you can manage your client’s account and send VAT returns on their behalf through the government gateway.
Creating an agent services account
Head to the gov.uk website to create an agent services account. In order to do this, you must be responsible for your firm’s tax and administrative matters and registered as an agent with HMRC. If you’re creating an account for a Limited Liability Partnership, you must be a registered member.
Once you’ve created an agent services account, you’ll either need to copy across existing VAT clients from your HMRC online services account (more information can be found here), or, if you want to act for a client that has not been copied across, they’ll need to sign up to MTD and do it themselves, or authorise you to do it on their behalf.
If you want to take the latter approach, head to your agent services account and select ‘ask a client to authorise you’. This creates an authorisation link for you to send to your client.
Now, your client should be all set up for MTD, allowing them to embrace both the digitisation of tax, and hopefully drive even greater efficiencies through broader digitalisation.
By Stuart Miller, Head of Industry Engagement, Xero
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