Most Businesses Not Ready for Making Tax Digital
With less than six months to go before the introduction of Making Tax Digital (MTD), award-winning 360 Chartered Accountants, based in Hull and East Yorkshire, has decided to devote its next Saturday morning surgery to helping businesses understand the upcoming changes to the new tax legislation.
MTD is an initiative by HM Revenue and Customs to modernise the UK tax system using digital data. Initially it means that, by April 1st 2019, all VAT-registered businesses with a turnover above £85,000 will have to keep digital records and submit VAT returns using MTD compliant software – but worryingly, the majority of businesses aren’t ready and many are simply unaware of the changes.
Andy Jewitt, 360’s MTD specialist, says that some people think that because it’s been delayed a few times it will just go away – but they couldn’t be more wrong.
“This is the biggest change to the UK tax system since self-assessment was introduced in 1998. Manually entering your VAT figures into the Government Gateway is no longer an option. If businesses don’t ensure their software is compliant then they are inviting potential tax investigations and possible fines. I can’t stress how important this is. That’s why we are putting on this special MTD surgery to help businesses understand what they need to do in order to become compliant.
“HMRC also plans to introduce MTD for income and corporation tax from April 2020, so this is something that everyone needs to start thinking about.”
According to HMRC, 1.8 million businesses still file manual returns. The new legislation particularly affects these people but even those who use accountancy software may have to change the way they do things or at least upgrade to the latest version. Depending on when your financial year ends, it may also be sensible to introduce MTD software before the April 1st deadline.
Andy Jewitt continued:
“We’ve been using cloud accountancy for nearly 10 years so are more than well positioned to help our clients and other businesses with MTD. In fact 360’s strapline is Accountants for the Digital Age. We’ve encountered every issue, problem and challenge faced by online accounting and whilst we are confident all our clients will be ready, we do worry that those using more traditional firms of accountants may not be as prepared.”
The 360 “Saturday Morning Surgery” will take place this coming Saturday at 360’s headquarters on Albion Street in Hull. Experts will be on hand to explain how MTD works, recommend software, help in the transition and discuss any other queries you may have.