HMRC - new guidance on how to send VAT returns when exempt from Making Tax Digital for VAT

New guidance has been issued setting out how businesses should submit their VAT returns if they are exempt from using compatible software for Making Tax Digital (MTD) for VAT.

The method of submission will depend on the reason for exemption from MTD for VAT

1/ business applied for an exemption - the business will need to complete either a paper return or an online return using the VAT online account. (HMRC's exemption confirmation letter will advise which).

2/ businesses subject to an insolvency procedure - paper returns must be submitted unless the business has a company voluntary arrangement or individual voluntary arrangement in which case there is a choice of paper return for the online account.

3/ final VAT returns after deregistering for VAT - the online account must be used. (A VAT return cannot be sent using MTD software after deregistering for VAT).

HMRC has also updated its “Applying for an exemption from making tax digital for VAT” guidance to confirm that sending a final VAT return after that registration has been cancelled is an automatic exemption from MTD for VAT.