MORE than 47,000 businesses in the East of England, with a turnover above £85,000, have signed up to Making Tax Digital (MTD).
HM Revenue and Customs (HMRC) is now urging the remaining businesses, that are required to sign up in the region, to do it before the VAT filing deadline next month.
Many of the 1.2 million UK businesses affected by the MTD rules, which became law for VAT periods starting on or after 1 April, will be required to submit their first quarterly VAT return to HMRC using software by the 7 August, 2019. If paying by Direct Debit, these businesses must register by Monday 29 July, 2019.
MTD was first announced in 2015 and will make it easier for businesses to get their tax right, reducing tax lost due to avoidable mistakes.
HMRC’s reminder comes as it reveals:
At the moment, around 10,000 businesses are registering for MTD every day.
More than 600,000 businesses have signed up in total with some 400,000 submissions already successfully made using software.
Businesses in the agriculture sector (such as farmers) have been one of the fastest groups to sign up to MTD with 50% already registered
The financial sector has been one of the slowest to sign up with nearly 75% yet to sign up.
Theresa Middleton, Director of Making Tax Digital at HMRC, said: “Now is the time for businesses with an August quarterly filing deadline to sign up and join the hundreds of thousands already experiencing the benefits of MTD.
“During this first year we won’t be issuing filing or record keeping penalties to businesses doing their best to comply.”
East of England-based accountants, MHA Larking Gowen, said:
“We have worked with our teams to make sure they are fully aware of the reporting requirements of MTD and how to help our clients. As a firm we looked at the help and support available on GOV.UK and were able to use the information to upskill our team, who in turn have been able to support our clients in signing up to use the service.
“We have since made successful submissions through fully compatible MTD software products. Where this has not been possible, we have been able to support our clients with a bridging software solution which is sufficient for their needs.
“Whilst there have been a few challenges along the way, we can see that digitising systems and processes is the way to go. We can see the benefit in freeing up time for both ourselves and our clients, allowing us to concentrate on other elements of ours and their business.”
The MTD rules became law for VAT periods starting on or after 1 April 2019 and require VAT-registered businesses with taxable turnover of more than £85,000 to keep their VAT records digitally and to submit their VAT return direct from their MTD-compatible software.
HMRC expects MTD to reduce tax lost due to errors, thanks to the improved accuracy that digital records provide and the fact that information is sent directly from software to HMRC.
The latest tax gap figures showed avoidable mistakes cost taxpayers more than £9.9 billion last year – £3 billion attributable to VAT alone.