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Nearly 900,000 businesses not ready for Making Tax Digital changes

A third of all VAT-registered firms are not ready to file their returns digitally, a survey suggests.

From April 2019, all VAT-registered companies with a turnover of £85,000 will need to file their VAT returns digitally. Despite pleas from many business communities, the government has decided not to delay this change.

Unfortunately, despite this fact, a large percentage of the firms who will be affected by Making Tax Digital (MTD) are nowhere near ready for it. A recent survey carried out by YouGov in conjunction with RSM, revealed that 880,000 firms might be unprepared. John Forth, who is the VAT partner at RSM, said:

“MTD is one of the biggest shake-ups in tax administration for over 20 years. But with just six months to go before the rules come into force, there’s a worrying number of VAT-registered business that are completely unaware of the changes.”

When the Institute of Chartered Accountants in England and Wales (ICAEW) surveyed 500 companies, in July, they discovered that nearly half of them were not even aware of the digitalisation of VAT returns. Their research also revealed that only 54% of the firms that are VAT registered actually use accounting software. This is a big problem because one of the key requirements of the new system is that companies use MTD-compliant software.

Fortunately, accountants in Chester and other parts of the UK, are ready for MTD. Many of them have already checked that their software is compatible with the necessary Application Programme Interface (API). This means that they can take care of filing their client’s VAT returns in a way that complies with the new HMRC system.

Posted by Louise
October 24, 2018

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