What does the VAT portal closure mean for small businesses?

It’s official. HMRC closed the online VAT portal on 1 November. This means VAT-registered businesses must now use making tax digital (MTD) compatible software to file quarterly or monthly VAT returns. Those who are not already doing so have no choice but to start using digital tools to submit their returns or risk financial penalties – unless they are digitally exempt. By doing so these businesses can achieve a number of benefits from increased efficiency to the optimisation of once onerous tasks.

There is of course further change on the horizon. In April 2024 MTD for income tax becomes mandatory for sole traders and landlords with gross income of over £10 000 a year. Although separate from MTD for VAT with its own rules and regulations those affected can learn from the VAT-registered businesses that adopted digital tools before them.

With this...