Adjusting to Making Tax Digital might not be easy for business owners, but they will be better for itSmall businesses are urged to double check that they really are Making Tax Digital compliant before they face complications.
HMRC is stepping up its advice to VAT registered small businesses in an initiative called Making Tax Digital (MTD), in anticipation of getting those that need to be signed-up, fully registered ahead of the 7 June and 7 August filing deadlines. All businesses that are VAT registered and have a turnover of £85,000 or above must sign-up to the new scheme.
New research that surveyed the outlook of 500 small businesses by QuickBooks reveals that 9 in 10 have heard of the government’s MTD initiative, and two thirds of them strongly believe they are compliant. But are they?
Analysis of these small businesses’ filing methods reveals that 46% of small businesses wrongly think they are compliant when actually they’re not.
That’s approximately 346,000 small businesses who could get caught out when it comes to filing compliantly to HMRC MTD rules for VAT.
“The UK is embracing digital, putting it at the heart of everyday business and transforming productivity,” Chris Evans, VP and country manager at Intuit QuickBooks UK said. “We believe MTD is set to accelerate this digital transformation so we commissioned the research to understand how small businesses are embracing change and how we can deliver tools to make it easier.”
“These results are clear; there’s still uncertainty around MTD and what constitutes compliance.”
Here are five tips to make sure businesses are compliant with MTD filing requirement for VAT and start filing VAT returns without unnecessary hiccups:
- CHECK – Are you really MTD compliant? Check directly with HMRC to be sure, or use a free checker widget to run through the requirements
- TRACK – Start keeping your business records digitally immediately, a Financial Management Software (FMS) application can help with this
- CLEAR – Any outstanding VAT filings that are due, once a business is signed up for MTD the previous Government Gateway portal will no longer be accessible to it
- REGISTER – It’s not automatic, it is the responsibility of each business to opt-in for MTD on the HMRC website – they won’t auto enrol
- PREPARE – In advance, don’t leave it until the night before the VAT return is due, as not everything can be done straight away. It’s advised that you register at the latest two weeks before, as it can take some time to set up (e.g. transfer direct debit information).
QuickBooks launched a free checker tool today to help businesses with step 1 above. The free to use MTD Checker tool helps to demystify what it means to be ‘digital’ in the eyes of HMRC, as the new tax legislation continues to roll out and, the first major VAT filing deadlines approach.
Have you double checked compliance with Making Tax Digital?
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