HMRC begins sending MTD for VAT ‘nudge’ letters to firms

HMRC has started to send Making Tax Digital for VAT (MTD for VAT) ‘nudge’ letters to firms it thinks should’ve signed up to the scheme but have not yet done so.

According to the Institute of Chartered Accountants in England and Wales (ICAEW), HMRC first sent nudge letters to VAT-registered firms in 2019. It is now following up on those letters and contacting businesses which have not yet signed up for MTD for VAT but are required to do so.

The ICAEW stated that HMRC is only writing to firms it is confident should have signed up. HMRC does not intend to write to businesses that previously got in contact to advise that they are not in the mandated group.

A small number of firms which are not required to comply with MTD for VAT may be sent compliance letters: the ICAEW advises such firms to contact HMRC and explain their circumstances ‘to avoid further contact when the compliance activity starts’.