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Making Tax Digital (MTD) October 2018 Update


Hi @mphayesuk

If you haven’t already, you’ll need to register with HMRC for their pilot scheme, and to ensure you’re eligible.

Once you’ve done this, let us know and we’ll enable it on your account for you.


We now have confirmation from HMRC that we can file VAT returns via software so could you please enable this on our account?
Many thanks


I’m in the same situation as @johnsm13 - VAT registered years ago, but annual turnover less than 85K. There seems to be no information about what firms in our situation are expected to do after April 2019.


Hi @sbanton

I believe that the threshold would not make a difference in this case. When MTD VAT is rolled out, any VAT registered business would likely need to submit their return through a MTD compatible software package.


I don’t understand why there isn’t a definitive answer to this question - how come it’s only “likely”? Haven’t HMRC said one way or the other?

Thanks for replying - are you able to query HMRC directly about this? I’ve emailed them but have had no response.



Hi @sbanton

There are still some details regarding MTD which haven’t yet been confirmed. HMRC will be able to confirm the position for your business.

At the moment for example, only certain businesses can join the MTD VAT pilot, but HMRC dictates and enables this for individual businesses.


@sbanton @johnsm13

I’ve asked HMRC to clarify on this point. It’s unlikely we’ll get a response until after the New Year, but as soon as I hear anything I will update you both.


@sbanton @johnsm13

We’ve received the below response from HMRC regarding your query. Hopefully this helps.

  1. MTD is only mandatory for those over the threshold, those who are voluntary or under the threshold can still use the government gateway. ”Only businesses with taxable turnover that has never exceeded the VAT registration threshold (currently £85,000) will be exempt from Making Tax Digital. You will therefore need to keep an eye on your taxable turnover, especially if you think it is close to the VAT registration threshold.”

  2. The only exceptions are those who are currently exempt. Those exemptions will still apply, otherwise, if you are over the threshold, you will need to find MTD compliant software



Wonderfully arcane response from HMRC, as usual. “Only mandatory for those over the threshold” immediately followed by “Only (those) that (have) never exceeded the threshold”).

So the edge case of those who were once over the threshold, but are no longer turning over that amount and yet are still VAT registered, remains unanswered. Perhaps we fall into the “voluntary” category, in that we could choose to de-register but have so far not done so.

It’ll be interesting to see what HMRC eventually say in response to my own email to them, asking the same question.



Here’s HMRC’s response to my enquiry to them on this topic…

As you are aware with effect from 1 April 2019, if your taxable turnover is above the VAT registration threshold you must follow the rules set out in VAT Notice 700/22: Making Tax Digital for VAT. However, if you’re taxable turnover subsequently falls below the threshold you will be required to continue to follow the Making Tax Digital rules, unless you deregister from VAT or meet other exemption criteria.

Only businesses with a taxable turnover that has never exceeded the VAT registration threshold on or after the effective date will be exempt from Making Tax Digital and continue to submit VAT Returns using the existing method.


  1. As of 1st April 19 if above threshold => must do MTD
  2. If subsequently falls below threshold => must continue with MTD


  1. If never exceeded threshold on or after 1 April 19 => can continue with existing method

…so if I’m VAT registered, but my turnover is below the threshold as of 1 April 19 and it continues to stay that way, I don’t have to use MTD?

Does that sound correct, based on reading what HMRC have said to me and to you?



Yes that sounds correct.

From all I have read on MTD this is the way I understand it:

From 1st April 2019, if you exceed the vat threshold you must go on the MTD system.
Once you are on MTD you stay on it even if you fall below the threshold unless you deregister from vat