MTD for VAT rules will apply to all VAT-registered clients from Friday 1st April

The next milestone of the government’s rollout of Making Tax Digital (MTD) is very nearly upon us: from the end of this week, MTD for VAT rules will apply to all VAT-registered clients. 

What does this mean?

From 1st April 2022, all VAT-registered clients will be required to follow MTD for VAT rules, regardless of turnover, and the option to file VAT returns through HMRC’s website will no longer be available. 

MTD-compatible software will need to be used to store all of your VAT-registered clients’ business records - and submit their VAT returns to HMRC - for all their VAT periods starting on or after Friday 1st April 2022. 

FreeAgent is MTD-compatible and supports the filing of clients’ MTD VAT returns. 

What do I need to do?

You may already use FreeAgent to submit MTD VAT returns for clients whose turnover is above the VAT registration threshold. If this is the case, you’ll need to request authority from your agent services account to file MTD VAT returns on behalf of your remaining VAT-registered clients and then sign those clients up to MTD with HMRC. 

On the other hand, the change in rules on Friday might mean that you’ll need to start submitting MTD VAT returns for the very first time. If this is the case, you’ll need to follow the full process for getting your practice and clients set up for MTD for VAT. Our Knowledge Base includes instructions on adding a new client and transferring an existing FreeAgent account if you need a reminder of these processes.

To make the transition to MTD as smooth as possible, you might want to consider segmenting your clients who will be affected by the change in rules on 1st April.  

Learn more about how FreeAgent can help as HMRC continues its rollout of Making Tax Digital.