VAT News

Making VAT Digital – New VAT registrations from 1 August get automatic sign up


In the latest HMRC Agent’s Brief 98 there was a clarification as to a change in the VAT registration procedures for those businesses in the process of registering for VAT:

Updates to the VAT Registration Service (VRS) from 1 August

HMRC has been developing a new VAT Registration Service (VRS) which will speed up the process and improve our security. We have been testing the service throughout the past 18 months and have now had over 37,000 customers successfully register their own business. The next step is to switch on the new functionality for Agents, at which time we will divert all new applications from the legacy service. One of the key changes is that every customer will be automatically signed up to Making Tax Digital as part of registration, removing the need for that extra step.

The service will go live on 1 August 2022. We recommend that if you have incomplete, unsubmitted VAT applications for your customers, that these are submitted by 31 July 2022 at 5pm. Any partially completed, saved applications on the old service will be lost after this time. You will however have the same functionality in the new service to save applications for up to 4 weeks before submitting them.

Any further details surrounding the new service will be published in future Agent Updates.”

Making VAT Digital accounting procedures have become mandatory for all VAT registered entities from 1 April 2022 unless exceptions can be applied. This further process step when new businesses VAT register is a further reminder of what we see as, the increased attention that HMRC will be paying to compliance with the digital links agenda that sits within Making VAT Digital. There have already been reminders of the penalties that are to be applied – some on a daily basis – to those businesses that fail to operate compliant VAT accounting processes in this regard.

As access to resources increase with HMRC through new staff recruitment, as well as the return of VAT staff teams from Brexit and COVID related areas within HMRC, we expect to see an increase in attention to the management of digital processes to produce and submit the VAT return. Perhaps, as many tax payers deal with the on-going hybrid working model within their organisations, a sense-check might be justified on the digital compliance of VAT accounting processes to ensure that in the upheaval of recent years, VAT data elements have not fallen between cracks.

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