HM Revenue & Customs are pushing on with their plans to turn the UK into one of the most digitally advanced tax regimes in the world.
However, despite Making Tax Digital (MTD) drawing ever closer, there are still a worrying percentage of businesses that are not yet ready to comply.
While those VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) must be ready by April 1, figures published by the House of Lords Economic Affairs Committee in December indicated that a full third of those affected are still unaware of the new legislation and have not considered how they are going to get their affairs in order.
The Economic Affairs Finance Bill Sub-Committee had recommended delaying the roll-out of MTD based on poor awareness, limited availability of bridging software and insufficient opportunity to respond to issues identified as a result of the pilots, but this notion has since been rejected.
That being said, the Government has recognised that it may not be all plain sailing in the first instance and, as a result, businesses will benefit from a “soft-landing” period of a year, during which they will not be fined if they don’t comply with the reporting requirements in time.
In addition, HMRC recently announced on their website that “During the soft-landing period only, where a digital link has not been established between software programs, HMRC will accept the use of cut and paste as being a digital link for these VAT periods.”
Toni Hunter, Partner at George Hay, said “The fact that a third of businesses are not aware of their obligations under MTD is, quite frankly, astonishing and extremely concerning.”
“Despite HMRC having agreed to certain concessions in the first year, we are still strongly of the opinion that this should not give businesses reason to sit back and be complacent; complacency early on will only create problems further down the line.”
“With so much political and economic uncertainty ongoing, we know that businesses are keen to busy themselves with the day-to-day in a bid to ride the wave and stay afloat but, at the same time, they are forgetting that MTD compliance is a legal requirement that cannot be ignored.”
“If you are reading this and you know that you are within scope of the upcoming changes and you haven’t yet taken any steps to satisfy the new requirements, then we would urge you to seek advice at the earliest opportunity.”
Cloud-accounting champion at George Hay, Samantha Green, had this to add “In addition to just making your business compliant for MTD there are many other advantages to establishing your bookkeeping on a cloud-based software package, such as automating your bank reconciliations and raising invoices from anywhere with an internet connection.”
“Automating some of these processes can lead to production of real time management reports in just a few clicks, helping you to keep on top of your business performance.”
Here at George Hay, we want to see the businesses we work alongside continue to thrive following the implementation of MTD and we are already helping many of our clients to look at it as an opportunity, not something to oppose.
We can help you when it comes to choosing and implementing a system matched to your businesses requirements and we can provide professional advice throughout the transition and beyond.
We are able to work with a range of online accounting software packages so, when it comes time to take the leap, we have trained advisers on hand to provide as much or as little assistance as you require.
To discuss your circumstances in more detail with one of our experts, contact us today. To read more about MTD, why not take a look at our handy summary of the story so far, here or explore the MTD page on our website here.