The new VAT registration service was extended to all traders at the end of 2021.

The rollout comes ahead of the introduction of Making Tax Digital (MTD) for VAT for all VAT-registered businesses, regardless of income, from April 2022.

What has changed?

Launched in November 2020, the new online VAT registration service was only available to limited companies. But HM Revenue & Customs (HMRC) extended the service to sole traders and other eligible entities at the end of 2021.

Agents, meanwhile, can now use the service from “early 2022”.

The changes will prepare businesses for the introduction of MTD for VAT from April 2022. Under current legislation, only VAT-registered businesses with a taxable turnover above the VAT threshold (currently £85,000) are required to comply with the new rules, such as keeping digital records and submitting tax returns using MTD-compliant software.

But from April 2022, MTD for VAT will be extended to all businesses (except those with a digital tax exclusion), regardless of income.

What else is changing?

The tax authority has also almost completed moving all VAT records from its old database, known as the VAT Mainframe (VMF), to the new Enterprise Tax Management Platform (ETMP).

Once this process has finished, agents will only be able to access VAT services through the agent services account (ASA) rather than the old agent online services portal.

Get advice today

For help and advice with related matters, please get in touch with our VAT team today.

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