You may think things have gone a bit quiet with ‘Making Tax Digital’ so here’s an update on where we are at. Preparations for Making Tax Digital are “progressing well”, according to the UK Government with MTD for VAT set to be introduced fully in April 2019. The new strategy was first announced in 2015 and was designed to ensure the tax accounts of the self-employed, businesses and landlords were filed digitally. However, the timetable for MTD was amended in 2017 following concerns about the impact on businesses.
The MTD rollout
The system is being rolled out over two years. It was applied to income tax in 2018 and will be extended to VAT this year. It is set to be applied to corporation tax in 2020. Landlords and unincorporated businesses were told to file income tax returns digitally from 2018 if their annual turnover exceeded the VAT registration threshold, though those whose turnovers came below this level were given an extra year to prepare. Landlords, self-employed individuals and businesses with a turnover below £10,000 were told they were exempt from these requirements.
Reasons for MTD
The Government states that the new system has been designed to reduce errors considerably, though there have been concerns that the compliance requirements for small businesses will be tough to manage. The Federation of Small Businesses says more needs to be done to raise awareness of Making Tax Digital for VAT. Those that are eligible to submit VAT returns digitally are being urged to purchase software compatible with the MTD platform if they haven’t done so already. It’s said that UK small businesses lose around 15 working days per year to dealing with tax compliance obligations on average. In light of this, the FSB says HMRC should be doing “all it can to raise awareness”.
Get the help you need
The accounting software provider IRIS found that 78% of its clients were using spreadsheets for bookkeeping. It’s essential that all VAT-registered small businesses are able to obtain the advice and support they need to undergo the transition successfully. HMRC are not providing businesses and individuals with their own MTD software, which is why it’s so important to source the right accountancy management products for your needs.
Why Morgan Reach?
At Morgan Reach, we can help you prepare for MTD for VAT. We can provide you with clear, accurate, up-to-date advice on making your business compliant whilst protecting you from hefty fines and penalties. We can help you manage your accounts confidently and successfully. To find out more about how we can assist you, simply get in touch today.
Avoid penalties and stay compliant
The constantly-changing requirements of HMRC can make tax and accountancy management seem like a nightmare and distract you from your core duties, but we are here to keep your business compliant and enable you to focus on what you do best. When you have our support behind you, you can rest assured that you are complying with regulations, aren’t making any over or underpayments and won’t be met with late-payment penalties. We have offices in Birmingham, Manchester and Kensington, and you can get in touch with us and book a free no-obligation meeting today via the phone or by using our online contact form. You can also send a message to firstname.lastname@example.org.
DISCLAIMER: This article is for guidance only, and professional advice should be obtained before acting on any information contained herein. Morgan Reach Chartered Certified Accountants cannot accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the content of this article.