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HMRC is taking action to ensure that the remaining businesses who should have signed up to Making Tax Digital for VAT do so.

Since April 2019, most VAT-registered businesses with a taxable turnover above £85,000 (the VAT threshold), have been required to keep digital VAT records and to submit their VAT returns using MTD compatible software. Nearly 90% have signed up but there are still around 100,000 that have not.

Further to sending letters reminding businesses of their obligations, HMRC is trialling a closure of non-compliant businesses’ access to online VAT returns. A further, more extreme measure is being prepared; closing the online VAT return to those that have not signed up to MTD for VAT. This would mean that the business could not file their VAT return other than by using MTD software.

HMRC is writing to 800 businesses saying that though they will be able to file their March/April/May 2021 VAT return using the online VAT return, they will not be able to file subsequent returns this way. Businesses will be blocked from filing the next return (June/July/August 2021) using the online VAT return and will need to sign up to MTD in sufficient time to file that return using MTD software by 7 October 2021.

For help with MTD for VAT

If you have any queries relating to MTD for VAT, please get in touch. You can contact me by email at

About the Author

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Paul McMahon

As a partner in the firm, Paul’s role is to support clients by providing solutions-based accountancy, tax and business advice, predominantly to small and medium sized businesses.

To get in touch please e-mail

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