Changes to filing of non-MTD VAT returns

HMRC introduced the first phase of Making Tax Digital (MTD) nearly two years ago and they have now announced that non-MTD VAT submissions via software providers will not be supported from April 2021.

Filing non-MTD VAT returns with Xero

If you use Xero this means that quarterly VAT periods ending in December 2020, January 2021 or February 2021 will be the last VAT returns that can be submitted using the non MTD-VAT return. 

How can you prepare for this?

There are two options in preparing for this change. The first option is to register for MTD VAT with HMRC and then file VAT returns through the MTD VAT function in Xero ( you will need to do this from April 2022).

There is another option if you are not ready for MTD, or if you are under the threshold or part of a VAT Group. Xero have created a new non-MTD VAT return which can generate the VAT amounts and will be available from 23 November 2020. Please note that by doing it this way, you will be required to submit the return manually using HMRC online services or by using MTD bridging software (we can do this for you as part of our VAT service). This will also be the only non-MTD VAT return option in Xero for new trials and subscriptions moving forward. 

If you do no use Xero and are not MTD registered the above is still applicable. From April 2021 you will need to register for MTD or use bridging software or file directly to HMRC.

If you need any assistance in getting MTD ready, or if you need us to guide you through non-MTD VAT returns, then please get in touch. You can call our VAT Compliance Manager Yvonne Collings on 01243 782 423 or send an email to [email protected]