The first main submission deadline for filing VAT returns through Making Tax Digital (MTD) came and went on 7 August 2019.

It affected around 490,000 of the UK’s 1.2 million VAT-registered businesses with annual taxable turnover of more than £85,000.

But, according to HMRC figures, only around 370,000 firms filed their quarterly VAT returns through MTD earlier this month.

The MTD for VAT process and subsequent submissions certainly went smoothly for the clients for which our bookkeepers prepare quarterly returns.

We managed most of the process – from registering for MTD and finding suitable digital solutions, to authorising the software and making submissions.

And for clients who resisted technology, it was straightforward for us to tailor their spreadsheets for MTD using bridging software for traditional spreadsheets.

Digital VAT return assistance

We also reached out to other VAT-registered clients to offer assistance, many of whom were grateful for our support.

Some tried to meet the first stagger submission themselves, only to encounter last-minute issues as the deadline approached.

These issues included authorising software and advising on compliant digital recordkeeping, such as recording minimum daily sales.

Fortunately, our bookkeeping service had capacity to submit VAT returns on their behalf using our own software as a temporary fix.

The most difficult obstacle we overcame surrounded clients who were reluctant to embrace software and continued to use manual bookkeeping.

We were able to keep them compliant by replicating their manual books in a spreadsheet, and using bridging software to submit.

Scale of non-compliance

After all the fanfare leading up to the launch of MTD for VAT on 1 April, it went without a hitch for our bookkeeping team.

But one in ten VAT-registered businesses – around 120,000 firms, according to HMRC – fell at the first hurdle.

Authorising software proved to be a problem for some, as owners failed to click the authorisation link.

Others who pay by direct debit reportedly signed up in the seven working days prior to their filing deadline, or in the five working days after.

Some criticism was also directed at the Revenue for not populating the VAT return obligations on their side.

HMRC’s light-touch approach to MTD

Depending if their taxable turnover is at or above £85,000, non-compliant businesses would face a fine of up to £400 for missing the deadline.

But a light-touch approach towards penalties is being taken by HMRC until 1 April 2020, to give firms more time to adapt.

HMRC advised businesses that didn’t make the August deadline to file their return as they have done previously, such as via the VAT portal.

Further assistance

Whether you need our assistance with MTD for VAT or are struggling to make sense of MTD ahead of your stagger submission deadline, we can help.

Our digitally-savvy experts use a range of MTD-compliant, HMRC-approved software such as Iris, Kashflow, Sage, Xero and QuickBooks.

Speak to one of our advisers by calling 0141 221 257 or email us at to find out how we can help your business with digital accounts.