VAT-registered and waiting patiently to make your first Making Tax Digital (MTD) for VAT submission? When you consider the time it takes to complete all the steps to get your business ready, the real deadline could be much closer than you think!
To help you on your way – and ensure you’re ready with time to spare – this guide walks you through everything that you need to do, estimates how long each step will take and explains how FreeAgent can make preparing for your first MTD for VAT submission as painless as possible.
1. Sign up to FreeAgent (allow 10 minutes)
FreeAgent is easy-to-use, MTD-compatible software and signing up is simple. As well as preparing your business for digital VAT filing, FreeAgent has a stack of great features to help you relax about tax, nail the daily admin and see the bigger business picture.
Have a closer look at FreeAgent’s features and take a 30-day free trial to get the preparation for your first MTD for VAT return off to a flying start.
2. Register for MTD for VAT with HMRC (allow around seven working days)
While Wednesday 7th August 2019 is the first hard deadline for some quarterly VAT filers, the amount of time it takes to sign up and register for MTD for VAT with HMRC means you’ll have to get going well in advance.
The date by which you’ll need to register depends on when your business’s first MTD VAT quarter begins and how you pay your VAT bill:
VAT quarter starting in April 2019:
Paying by Direct Debit: you need to register for MTD for VAT with HMRC by 26th July in order to meet the 7th August filing deadline.
Paying by another method: you need to register by 2nd August in order to meet the 7th August filing deadline.
VAT quarter starting in May 2019:
Paying by Direct Debit: you need to register for MTD for VAT with HMRC by 29th August in order to meet the 7th September filing deadline.
Paying by another method: you need to register by 3rd September in order to meet the 7th September filing deadline.
VAT quarter starting in June 2019:
Paying by Direct Debit: you need to register for MTD for VAT with HMRC by 26th September in order to meet the 7th October deadline.
Paying by another method: you need to register by 2nd October in order to meet the 7th October filing deadline.
3. Get your accounts in order (this could take a while!)
New to FreeAgent? There are a few things you need to get right before you can file VAT, like setting your accounting dates and backfilling transaction data.
If you’re already using FreeAgent, it’s worth checking now to make sure your accounts are ready.
In both cases, we recommend that you set time aside to find out how to prepare for MTD for VAT in FreeAgent. This will help to ensure your accounts are up to date and in order for digital VAT filing.
How Open Banking can help
With our Open Banking bank feeds, backfilling transaction data has never been easier. If you have a current account with one of the supported banks then being able to pull in data from your bank account through Open Banking will save a lot of time.
4. Connect to HMRC (allow five minutes)
Once you’ve signed up to MTD for VAT and checked that your accounts are in order, you’ll be ready to link the two together.
In your FreeAgent account, navigate to ‘Settings’ and select ‘HMRC Connections’. Then follow the simple instructions on how to authorise FreeAgent to interact with HMRC on your behalf.
The whole process won’t take longer than five minutes and at the end you’ll see this message:
For a full walk-through of this step, check out our guide to setting up your MTD for VAT connection in FreeAgent.
5. File your first MTD VAT return (this will only take minutes using FreeAgent!)
Once you’ve gone through the above stages, the hard work is over! Filing your MTD VAT return from FreeAgent is a simple case of double-checking the figures and clicking a button to submit to HMRC.
While it’s unavoidable that getting organised for your first MTD VAT return will take a bit of effort, once you have everything set up, your next VAT return will be a breeze. If you continue to keep your accounts up to date, for all future VAT returns FreeAgent will automate the bulk of the process: pre-filling the return, calculating your bill and enabling you to double-check the figures before submitting directly to HMRC.
Find out more about submitting digital VAT returns from FreeAgent.
Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.