MTD for VAT: Deferred Business – Act Now

As most will now be aware, MTD for VAT came into effect for most UK VAT registered businesses trading above the VAT threshold of £85,000 per annum from 1 April 2019.

This meant that for the first quarter starting after this date (30 June 2019, 31 July 2019, 31 August 2019), these affected businesses were required to register for MTDfV with HMRC and submit their VAT returns directly to HMRC using functionally compatible software (e.g. Xero, Quickbooks, Sage L50 etc.).

We are pleased to report that we have now successfully been able to assist our affected clients during this transition and all those clients affected by MTDfV have now been fully signed up for the scheme and have submitted at least one MTDfV return successfully. We can report no major issues.

As part of this process, the government announced in 2018 that there was to be a deferred start date for MTDfV that would apply to a small group of complex businesses and these entities were not obliged to register for MTDfV until their first quarter end that started after 1 October 2019 (31 December 2019, 31 January 2020, 28 February 2020). The affected businesses included:

  • Trusts
  • ‘Not for profit’ organisations that are not companies (this includes some charities)
  • VAT divisions
  • VAT groups (the deferral applies to the group registration only and not to any group companies that are not covered by the group registration)
  • Public sector entities that are required to provide additional information alongside their VAT return (such as Government departments and NHS Trusts)
  • Local authorities and public corporations
  • Traders based overseas
  • Those required to make payments on account
  • Annual accounting scheme users.

We are aware that all deferred businesses should have received a letter from HMRC stating that its requirement to register for MTD was deferred until 1 October 2019.

As we are now near the end of November, it is time for these businesses to sign up for MTDfV with HMRC and ensure that they have the appropriate accounting software package or subscription to enable them to be fully MTD-complaint.

If you are part of a complex business that falls under one of the above categories, please get in touch with our specialist digital team that would be more than happy to have a discussion about your requirements for MTDfV and what steps you will need to take.  Our experienced advisers can also recommend the right accounting software for your business and assist you with the signing up process with HMRC.

UK VAT-registered traders based overseas

We are aware of issues where HMRC’s system will not recognise a non-UK based trading entity’s company registration number and therefore are not yet able to sign up for MTDfV. HMRC are currently in the process of fixing this error, but at the time of writing this issue is still ongoing and so for the time being any overseas UK VAT-registered business should continue to submit VAT returns the normal way.

If you are an overseas UK VAT registered trader and will be required to become MTD-complaint, please contact us and we can discuss with you any updates and what you should do in the meantime.

If you would like to discuss MTDfV with one of our experienced advisers please contact us on 0131 558 5800 or email us at