By Clare Elsby
Business Development Director
Elsby & Co
A LACK of awareness amongst UK business over the government’s looming Making Tax Digital (MTD) deadline will likely be no defence against HMRC’s demand for VAT-registered companies to move their tax affairs online
Making Tax Digital (MTD) is set to be phased in from April 2019, at which point businesses with a turnover exceeding the VAT threshold of £85,000 will be required to keep digital records and submit their tax returns only using MTD-compatible digital systems.
However, a recent survey by the British Chamber of Commerce found there is still a widespread lack of awareness among business communities about the switch to a new digitised system.
The analysis discovered that 24 per cent of firms have no knowledge about MTD at all, while a further 66 per cent either have only basic knowledge of the scheme, or know of it just by name.
Among businesses that are aware of MTD very few are preparing for it, according to the report, with just one in four of those firms who know ‘a lot of details’ about MTD having made plans for its implementation.
Some groups are now calling for the government to delay MTD’s introduction, with just months to go before the deadline, and focus on supporting businesses through the Brexit process.
However, all indications from the government at present are that this plea will cut no ice.
MTD is part of a determined push by HMRC to make tax reporting and billing more accurate and straightforward by allowing businesses to update and access their financial information and submissions on a live basis.
It will also serve to clamp down on a tax collection shortfall from traders who don’t declare their income accurately, or, in other words, tax fraud.
This digital revolution is part of the ongoing trend to move almost every aspect of business operations online. Most people will have noticed similar developments at banks as chequebooks are withdrawn from circulation and branches are increasingly closed along with other walk-in services.
Elsby & Co has been preparing for MTD over the past year and our team are fully trained and qualified in cloud accounting to help our clients review their needs in making the switch to digital.
However, be warned. This is new territory for many businesses, accountancy firms and HMRC itself. We are advising all of our clients to contact us at the earliest opportunity to be prepared for this change.
For further details contact Elsby & Co on email , telephone 01604 678470, or visit www.elsbyandco.co.uk