Making Tax Digital for VAT: HMRC announces further milestones reached

HMRC has advised that more milestones have been reached in the rollout of Making Tax Digital (MTD) for VAT.

• Currently, over 1.1 million businesses have signed up to the VAT service with over 1.2 million submissions.
• In the period leading up to the stagger 2 filing deadline on 7 September 2019 the service performed exceptionally well in handling high volumes of traffic.
• Over 230,000 stagger 2 businesses (74%) have now signed up. HMRC will shortly be writing to the 80,000 businesses in stagger 2 who still need to sign up. This approach has delivered positive results in encouraging sign-ups from the monthly filers and the stagger 1 cohort.
• The number of stagger 1 businesses signing up to the service continues to increase. And over 80% of this mandated population are now using the service.
• By 7 October, stagger 3 businesses are due to file their first VAT return through MTD. Currently 60% have signed up to the service. To encourage further sign-ups HMRC will be sending emails to those businesses who still need to act.
• Sign-ups remain HMRC’s lead indicator for monitoring compliance with the new MTD rules, as by signing up businesses are signalling their intention to comply.
• HMRC has received feedback that people would also find it useful to know what proportion of those who have signed up file their returns on time through MTD. Of the stagger 1 mandated group, 94% of those who had signed up filed by their 7 August deadline. Similarly, for the stagger 2 mandated group, 94% of those who had signed up filed by their 7 September deadline.
• With almost 300 telephony staff dedicated to MTD, HMRC reports that the VAT helpline continues to perform well. The wait times overall, and especially around key filing dates when demand is at its highest, have remained within the five-minute average wait time for August and September.

For the vast majority of businesses and agents the service works as intended with good feedback on customer experience. However, for a very small minority the experience has not been as HMRC had intended, for which HMRC apologises. HMRC continues to make strong progress in resolving issues as quickly as possible and is using that learning to improve the services.

HMRC is focusing on supporting businesses in helping them move to MTD and get it right. HMRC will not unnecessarily penalise businesses who are doing their best to make the transition.