{"id":8269,"date":"2021-06-17T12:00:40","date_gmt":"2021-06-17T11:00:40","guid":{"rendered":"https:\/\/www.sage.com\/en-gb\/blog\/?p=8269"},"modified":"2025-12-24T10:36:49","modified_gmt":"2025-12-24T10:36:49","slug":"voluntary-vat-file-vat-returns","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-gb\/blog\/voluntary-vat-file-vat-returns\/","title":{"rendered":"Voluntary VAT: Here\u2019s what HMRC\u2019s April 2022 mandatory Making Tax Digital requirements mean"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tStrategy, Legal & Operations<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\tVoluntary VAT: Here\u2019s what HMRC\u2019s April 2022 mandatory Making Tax Digital requirements mean\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t

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\n\t\t\t\n\t\t\t\t\"\"\t\t\t\tKeir Thomas-Bryant<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n

If your business has been voluntarily registered for VAT, you\u2019ll have to change how you make VAT submissions \u2013 how you file VAT Returns \u2013 as of April 2022. You\u2019ll also need to switch to digital record keeping for your VAT accounting.<\/p>\n\n\n\n

This is because Making Tax Digital for VAT will become mandatory for all businesses registered for VAT.<\/p>\n\n\n\n

HMRC says it\u2019s notifying businesses of this change.<\/p>\n\n\n\n

In this article, we explore the reasons why this change is happening \u2013 and provide the lowdown on what options are available in order to be compliant with\u00a0VAT<\/a>.<\/p>\n\n\n\n

But first, we need to highlight an urgent potential issue with direct debits affecting VAT-registered businesses before that point. This issue is independent of any MTD requirements or changes, but will affect those that have not yet signed up to MTD.<\/p>\n\n\n\n

Here’s what we cover:<\/p>\n\n\n\n

VAT direct debit changes for voluntary filers: What you need to know<\/a><\/p>\n\n\n\n

Voluntary VAT and MTD: What\u2019s the problem?<\/a><\/p>\n\n\n\n

Voluntary VAT changes: Why switch to MTD for VAT now?<\/a><\/p>\n\n\n\n

Digital linking and MTD for VAT<\/a><\/p>\n\n\n\n

MTD for Income Tax: Getting ready<\/a><\/p>\n\n\n\n

Final thoughts on voluntary VAT and Making Tax Digital<\/a><\/p>\n\n\n\n

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A guide to Making Tax Digital for VAT<\/h2>\n\n\t\t\t\t\t\t\t\t\t
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Need help with Making Tax Digital? Download this free guide to learn about MTD for VAT, so you can send your VAT Returns in line with HMRC’s requirements.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tDownload your free guide<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"\"\t\t\t<\/div>\n<\/div>\n\n\n\n

VAT direct debit changes for voluntary filers: What you need to know<\/h2>\n\n\n\n

HMRC has communicated to accountants that it\u2019s making some changes in its systems relating to voluntary VAT filers outside of the MTD system.<\/p>\n\n\n\n

Put simply, if HMRC does not have a valid email address for you then you might find your existing direct debit is cancelled. This might mean you miss payments, which could incur a penalty.<\/p>\n\n\n\n

If affected by this, you\u2019ll need to setup a new direct debit mandate through your business tax account, or make alternative payment arrangements, such as paying manually.<\/p>\n\n\n\n

To avoid any issues, log into your business tax account and check that the email address on record is correct. Bear in mind that you may have created the account some time ago, using an email address you no longer use.<\/p>\n\n\n\n

Alternatively, if your VAT accounting<\/a> and filing is handled by your accountant, you may wish to speak to them about this issue.<\/p>\n\n\n\n

Note that this issue does not relate to the mandated switch to MTD discussed above and, in fact, signing up for MTD will involve creating an entirely new direct debit mandate at that time.<\/p>\n\n\n\n

Voluntary VAT and MTD: What\u2019s the problem?<\/h2>\n\n\n\n

But now, let\u2019s take a look at MTD and the requirement for voluntary VAT filters to follow its rules as of April 2022.<\/p>\n\n\n\n

Under existing UK VAT rules, businesses with a VATable turnover above the VAT threshold are required to register with HMRC for VAT.<\/p>\n\n\n\n

Businesses below this threshold are not required to register with HMRC for VAT. But many choose to do so as this lets them reclaim the VAT paid on most purchases.<\/p>\n\n\n\n

These are known as voluntary VAT payers or voluntary filers.<\/p>\n\n\n\n

As all VAT-registered businesses are aware, they must report key information by submitting a regular VAT Return, and maintain correct VAT accounting records.<\/p>\n\n\n\n

As part of the Making Tax Digital for VAT roll-out in April 2019, HMRC required that all businesses above the VAT threshold kept records digitally and submitted their VAT Return using MTD-compatible<\/a> software.<\/p>\n\n\n\n

Voluntary filers had the option to sign up to MTD and submit their VAT return this way \u2013 although if they did, they had to keep digital records, as part of the wider MTD for VAT requirements.<\/p>\n\n\n\n

But as of April 2022, this is no longer optional. It\u2019s mandatory.<\/p>\n\n\n\n

All VAT-registered businesses \u2013 regardless of whether they\u2019re above or below the VAT threshold \u2013 must comply with MTD.<\/p>\n\n\n\n

This means:<\/p>\n\n\n\n