MTD for VAT – pilots and deferrals

  • By Pat Nown
  • 17 October 2018 00:00

As the long- awaited Making Tax Digital VAT public pilot service opens up to business, this is accompanied by the news that certain VAT-registered businesses (around 3.5% per HMRC) with more complex requirements will be deferred from being subject to MTD for 6 months.  This makes sense and was not unexpected. Full details are reflected in the  Policy Paper  ‘ Overview of Making Tax Digital’  which can be accessed here

Essentially, the public pilot is now available to sole traders and companies using standard VAT accounting. This applies whether returns are done monthly (excludes very large traders required to make monthly payments on account) or quarterly provided they are up to date.

For those that sign up this means  they will need to keep their VAT records digitally from the first day of the period covered by their next VAT Return and for agents wishing to sign up clients they will need to create their Agent Services account, if they haven’t done so already, and link any existing agent-client relationship to it, before attempting to sign-up clients to the MTD pilots.   

Further piloting plans

Further pilots both private and public are set to begin for partnerships, those that trade with the EU and users of the Flat Rate scheme, per the timetable below. Those customers with a default surcharge within the last 24 months will also be able to join the pilot by the end of October 2018.

Businesses in this section are NOT deferred and still currently have a mandated start date of 1 April 2019.



Late 2018

Private testing begins with partnerships, those customers that trade with the EU, and users of the Flat Rate Scheme.

Late 2018 / early 2019

Open to other sole traders and companies who are not up to date with their VAT and businesses newly registered for VAT that have not previously submitted a VAT return.

Early 2019

Open to partnerships and those customers that trade with the EU.

6 months deferral

Making Tax Digital mandated for customers in the following categories has been deferred until 1 October 2019:

  • trusts
  • ‘not for profit’ organisations that are not set up as a company
  • VAT divisions
  • VAT groups
  • public sector entities required to provide additional information on their VAT return (Government departments, NHS Trusts)
  • local authorities
  • public corporations
  • traders based overseas
  • those required to make payments on account (very large traders)
  • Annual accounting scheme users

Pilot testing for these groups is expected to open in Spring 2019.

Further information  for professional agents on signing up clients to MTD can be found  at  Guidance for agents and Update your clients business details for the pilot scheme

You can also keep your clients updated on MTD for VAT with the following products:

our client Briefing or client letter

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