VAT for voluntary filers

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As you will be aware, MTD is HMRC’s move to digitalise tax.

The scheme launched in April 2019 and meant that many UK businesses above the VAT threshold of £85,000 were required to submit VAT returns using their accounting software rather than submitting it manually through the HMRC gateway.

I am sure that all our Sage customers will look back on that period as fondly as our consultancy and support team do!

Since the original launch, there has been an update to VAT submissions for voluntary filers. This update will mean changes for users of Sage Business Cloud Accounting, Sage 50cloud Accounts and Sage 200cloud who are on versions that contain in-product XML submission capabilities – in addition to MTD functionality.

If you would like more specific information on the notice, please refer online to a dedicated article on the HMRC site HERE.

Also, please note that if you are already MTD compliant than this update does not apply to you.

What is Changing?

On 8th April 2021, HMRC is making changes to how VAT returns are submitted and the option to submit VAT returns electronically using XML format will no longer be possible. Not to worry, we have got it covered!

In Product Submission

To submit VAT Returns electronically using Sage Business Cloud Accounting, Sage 50 or Sage 200 software, you will need to register for Making Tax Digital (MTD) to submit your next return:

  • If you pay HMRC by Direct Debit, then you must sign up for MTD at least 5 working days after your last non-MTD VAT Return submission.
  • This needs to be at least 7 working days before your first MTD submission.
  • For other payment methods, there must be 24 hours after your last submission and 72 hours before your first MTD submission.

Making Tax Digital (MTD) will be the simplest way to submit using existing Sage software and we would strongly recommend this for the long-term success of your business. IMPORTANT NOTE : All customers will be required to register for MTD by 2022. Once successfully registered, customers will be unable to de-register.

What are my other options?

If you do not wish to go down the MTD route you have the option to manually fill out your tax return after 8th April on the HMRC portal.

You can either sign in to the government gateway here or create a government gateway account here. It is very important to check with your accountant before making any decisions on the VAT submission.

What about other products?

Other products such as Sage Intacct, Sage X3, Sage 300 and Sage ERP 1000 do not have an in-product XML VAT submission capability and therefore customers will already be using the MTD submissions module.

How can we help?

Since the introduction of MTD in 2019 we, at Smith Cooper System Partners, have been very active in ensuring our clients are aware, ready and compliant with these changes. However, due to the imminent deadline and the anticipated amount of activity in the coming months, we are now contacting all of our clients again to confirm plans for compliance.

If you have already ordered an upgrade to your Sage system or the MTD module in response to previous communications from us, then no further action is required. If you are currently a voluntary filer and have yet to confirm your plans for MTD compliance then you please contact us.

Furthermore, if you would like some more information regarding the upcoming change you can you can find some useful information on Sage’s Making Tax Digital hub or through the following rescources:


If you would like to discuss VAT for voluntary filers in more detail, then fill out the enquiry form or call 01332 587515

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