HM Revenue and Customs (HMRC) is advising businesses that have an annual turnover above the £85,000 VAT threshold to sign up to Making Tax Digital before the 7th August VAT filing date.
The Making Tax Digital (MTD) initiative is designed to bring the UK’s tax administration into the 21st century, while making the reporting process simpler and more efficient for taxpayers.
All VAT-registered businesses with a turnover above the current £85,000 VAT threshold will be legally required to digitally record their books and file VAT returns using MTD-compliant accounting software.
These VAT-registered businesses that fall within the scope of MTD and who file quarterly, are being told to sign up to MTD before the 7th August VAT filing date.
Many of the 1.2 million businesses affected by the rules, which became law for VAT periods starting on or after 1st April, will be required to submit their first quarterly VAT return dated 30th June 2019, to HMRC using software by 7th August.
HMRC’s reminder comes as it reveals:
- Currently, around 10,000 businesses are registering for MTD every day
- More than 600,000 businesses have signed up in total
- Businesses in the agriculture sector (farmers etc) 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.”
HMRC expects Making Tax Digital to reduce tax lost due to errors, thanks to the improved accuracy that digital records provide and 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.
Contact us today for Making Tax Digital for VAT support
At TaxAssist Accountants, we have spent considerable time developing the right support services to help small businesses through the MTD for VAT implementation period. We can advise you about compliant software like QuickBooks, which can help make managing your books easier, wherever you are.