Almost 4,000 small businesses have missed their first deadline for quarterly digital VAT returns, as part of the UK’s new Making Tax Digital (MTD) system. Are you one of them?
If you are a small business required to report VAT figures digitally for April, May and June 2019 should have done so prior to the 7th August deadline.
Luckily, HM Revenue and Customs (HMRC) has said it will not enforce late filing penalties for VAT returns this year providing you file VAT returns on time using the old HMRC portal. This will be the only leeway provided by HMRC, who are urging small business owners to keep pace with the digitisation of the UK’s tax reporting system and embrace cloud accounting.
All small businesses with annual incomes above £85,000 are required to sign up to Making Tax Digital for VAT and use accounting software, approved by HMRC, to comply with the new digital VAT returns system.
One of the biggest issues small businesses have faced so far in adopting MTD for VAT is the use of MTD-compliant software. Bringing new software in-house costs time and money, potentially hiring and training new staff, a problem easily resolved if small businesses work with MTD ready accountants, such as Southside Accounting.
A large proportion of small businesses also admit to making errors when filing their VAT returns, which may result in underpayments in VAT which could affect cash flow further down the line when found at by HMRC.
In addition, a recent YouGov poll found that just only 12% of small businesses felt “very prepared” for MTD. Meanwhile, 28% of small businesses were concerned about the additional costs incurred in maintaining a digital tax reporting agenda to keep on top of the additional administration.
At Southside Accounting, we offer a comprehensive Making Tax Digital service, utilising MTD-compliant software to make managing your accounts straightforward, wherever you are.
If you would like us to work with you through the changes to the VAT reporting landscape, avoiding unnecessary late filing and non-compliance penalties in the process, we’re here to help.
To arrange a free consultation on your MTD for VAT obligations, please contact us to see how we can help.