Business Tax Account – Time to be Digital

HMRC is in the process of ramping up some aspect of Making Tax Digital (MTD) while others are on “go slow” mode. For example, if you don’t have one you will need to set up a digital business tax account (BTA).

Do I Have a BTA with HMRC?

If an accountant or agent is representing you to handle tax compliance matters for your business, you may not have a business tax account (BTA). Otherwise, if you use one of the HMRC’s online services e.g. operating your payroll than you probably have one even if its not obvious. When you log into HMRC homepage, BTA is shown on top of GOV.UK banner.

What is happening next with Making Tax Digital (MTD)

With Making Tax Digital (MTD), there will be certain communications with HMRC that you can only do through your BTA, whether or not you have an accountant. Therefor every business to which MTD applies will need to have a BTA.

Setting up a BTA

If you don’t have a BTA already, it’s fairly easy to create one. First you’ll need a Government Gateway ID. Then visit HMRC’s online services page, answer a couple of questions about your business and follow the on-screen prompts.

 

To set up an HMRC business tax account start by creating a “government gateway”, if you don’t already have one.

 

  • Visit

https://www.tax.service.gov.uk/government-gateway-registration-frontend/choose-your-account?continue=%2Faccount&origin=unknown

 

  • and choose what sort of business you’re trying to create an account for.
  • Click the “Continue” button at the bottom of the page and answer the questions on the following pages.
  • Once you have a government gateway ID number (it will be shown on screen) continue to enter information about your business.
  • When you’ve answered all questions, you’ll have created an HMRC business tax account.
  • However, you won’t be able to fully use it immediately. HMRC will send you an activation code through the post within two weeks.
  • When it arrives go online and enter the code to start using your business tax account.

 

Act now for VAT

If MTD for VAT (MTDfV) will apply to you, you need a BTA sooner rather than later. For most registered businesses, MTDfV kicks off from the first VAT return period starting on or after 1 April 2019, so you need to have, and be reasonably familiar with, your BTA by then.

 

It’s compulsory

While the details are still being sorted by HMRC, at this stage it looks as if every business in MTD will be required to give HMRC an e-mail address. Plus, you’ll have to use the BTA if you change your accountant or other tax representative. The BTA will also be the only way to set different levels of permission to access tax records for persons inside your organisation. However, HMRC says it will keep to a minimum the number of things that can only be done through a BTA.

 

Any opt outs?

To avoid the need for a BTA you must meet tough criteria and HMRC will find an alternative way to communicate with you. However, even if you’re not required to have one, we think a BTA is worth signing up for.

 

What else can it do?

Apart from communications with HMRC,

  • a BTA provides useful information at a glance. For example, you can see the state of play with your tax returns, i.e. whether a return is required.
  • Your BTA will also show when and how much tax is owing or is owed to you.
  • You can pay tax through your BTA, and sole traders can reduce their payments on account, if appropriate.
  • Plus, if you filed your tax return online, you can use your BTA to amend it.

 

Some HMRC communications can only be done through a BTA. Although there are rare exceptions, you’ll need a BTA by April if Making Tax Digital for VAT will apply to you. Visit HMRC’s online services page, answer a few questions and follow the prompts.

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