Digital drive continues

The British Chambers of Commerce (BCC) has called for a delay in the introduction of Making Tax Digital (MTD) until the start of the 2020-21 financial year – but that looks highly unlikely to happen.

The taxman is pushing ahead with the programme, this month publishing further information to support businesses and agents in the run up to the start of the mandatory MTD VAT service from April 2019.

The BCC revealed that 24 per cent of firms have never heard of the initiative. And on top of that 66 per cent of those quizzed knew the project only by name.

According to the BCC that demonstrates a “widespread lack of awareness among business communities about the switch to a digitised tax system”.

Of those who were aware of BCC, a quarter admitted they had made no preparations ahead of the implementation date of April 2019.

According to Accountancy Age, BCC is calling for “breathing space” so HMRC can engage with businesses, ensure that the necessary software is in place, and raise levels of awareness about the impending changes”.

HMRC’s new raft of information includes a new VAT Notice and a page on the GOV.UK website providing a list of software developers it is currently working with during the MTD VAT pilot.

It says those developers have already demonstrated a prototype of their product ready to start testing with businesses and/or agents.

There is also communications pack which the taxman says will provide information to support businesses and agents to prepare for MTD.

A spokesman said: “Together, these provide additional clarity that businesses and their representatives have been asking for.

“HMRC has been working closely with software providers to help them to bring a wide range of MTD products to market, and has published a list on GOV.UK of those that are already at the stage of having demonstrated a prototype product ready to start testing with businesses and/or agents.”

As part of MTD, businesses registered for VAT with a taxable turnover above the VAT registration threshold of £85,000 will need to keep VAT records digitally and file their VAT returns using MTD compatible software.

This will start from their first VAT period starting on or after April 1 next year.

Businesses with a taxable turnover below the VAT threshold will not have to operate MTD, but can still choose to do so voluntarily.

VAT Notice 700/22: Making Tax Digital for VAT provides information to customers and adds to amendments to the VAT Regulations made earlier this year.

At WNJ we have developed a team of cloud accounting specialists who can advise on a number of software options including Sage, Xero, Quickbooks and others.

The aim of the team is to help clients get the most out of whichever software is appropriate for them; not just to comply with MTD requirements and VAT Return filing.

To discuss how we can help on any aspect of MTD and how it will impact on you please contact me on 01772 430000.

 

 

I manage the affairs of a portfolio of clients in a wide range of industries. In managing the audit and accounts department of WNJ, I always keep abreast of the latest technical information and legislative changes. Clients receive advice based on commercial awareness not simply historical reporting. Audit and assurance services for large range of clients, including charitable companies and pension schemes, Internal audit and systems reviews, Assisting and development of business start-ups.