With Making Tax Digital for VAT (MTD for VAT) set to take effect from 1 April, HMRC has warned UK businesses that the registration procedure will take up to seven days to complete.
MTD for VAT will apply for businesses which have a taxable turnover above the VAT registration threshold (currently £85,000). As part of the initiative, businesses must keep some records digitally, using 'functional compatible software'. This means a 'software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API)'.
In recently published guidance, HMRC stated that businesses that pay VAT by Direct Debit cannot sign up to the MTD for VAT scheme in the seven working days leading up to, or the five working days after, sending a VAT return.
In order to sign up to MTD for VAT, businesses will require their Government Gateway user ID and password, alongside their VAT number.
Once firms have registered, HMRC will send a confirmation email within 72 hours. Businesses are urged not to submit their VAT return until they receive the confirmation email.
The government has provided guidance on the matter – this can be found here.