MTD for VAT is now compulsory for all VAT-registered businesses from their first VAT period that starts on or after 1 April 2022. There are two vital steps to take before the transition to MTD can be completed for those not already using MTD.
Firstly, find MTD-compatible software you are happy with. This can be as simple as bridging software that reads your VAT data from a spreadsheet. Alternatively, you may want an accounting software package that is capable of doing more, for example submitting MTD ITSA (see Preparing for MTD for income tax) reports, which become compulsory from April 2024.
Secondly, identify the right date to sign-up for MTD for VAT with HMRC. The timing of this step is important.
If you sign up too early you may have to rush to submit your VAT return using your new MTD-compatible software earlier than you’ve prepared for. Also, there is a risk that your VAT payment could go missing from your last non-MTD return, if you switch to MTD before the direct debit payment has been taken.
It you are too late in signing up for MTD for VAT, you may not be able to submit your last VAT return at all, as the old VAT portal could be closed.
The ideal date to sign up to MTD for VAT depends on your VAT periods (see table) and whether you pay the VAT due by direct debit or not. In all cases, submit your final non-MTD VAT return before signing up to MTD for VAT.
| Periods starting | Pay by direct debit Sign up between: | Pay by bank transfer Sign up between: |
| 1 April | 13 May and 31 July 2022 | 8 May and 4 August 2022 |
| 1 May | 13 June and 31 August 2022 | 8 June and 4 September 2022 |
| 1 June | 13 July and 30 September 2022 | 8 July and 4 October 2022 |
