From Monday 15 May 2023, unless you are already using Making Tax Digital (MTD) compatible software, you will no longer be able to use your existing VAT online account to file manual VAT returns. That is because by law, all VAT-registered businesses must now use Making Tax Digital (MTD) compatible software to keep their VAT records and file their VAT returns.
What businesses need to do now to avoid a penalty:
Step 1. Choose MTD-compatible software that’s right for your business – talk to us immediately!
Step 2. Check the software permissions to allow it to work with MTD. Go to GOV.UK and search 'manage permissions for tax software' for information on how to do this.
Step 3. Keep digital records for current and future VAT returns – more information about what records must be kept digitally is on GOV.UK.
Step 4. File your future VAT returns on time using MTD-compatible software. You can find out how to submit your VAT returns on GOV.UK.
You may receive a penalty if you don’t file on time via compatible software. For VAT accounting periods starting on or after 1 January 2023 HMRC introduced new penalties for VAT returns that are submitted late and VAT which is paid late. The way interest is charged has also changed.
You can find more information about new VAT penalties on GOV.UK or by watching a recorded webinar for businesses.
Unregulated Buy Now Pay Later (BNPL) agreements will fall under full FCA regulation from 15 July 2026. For the first time, BNPL lenders will need to meet the same expectations as other consumer-credit providers. With almost 11 million UK adults using BNPL in 2024, according to an FCA survey, this is a significant change.
The government has published the draft secondary legislation for the UK’s Carbon Border Adjustment Mechanism (CBAM), which is due to go live on 1 January 2027. This is an important development for UK businesses importing affected materials.