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Thousands of businesses across the UK are slowly getting to grips with the new requirements for Making Tax Digital for VAT, but East of England accountants Moore Thompson say many remain unregistered and underprepared.
The most recent data from HM Revenue & Customs (HMRC) shows thousands of businesses are still yet to sign up for the new Making Tax Digital (MTD) regime for VAT, despite it coming into effect last month.
MTD requires around 1.2 million VAT registered businesses earning over the £85,000 threshold to keep their records digitally and submit online VAT returns.
However, HMRC has said that the initial sign up for the MTD has been slower than expected.
Mark Hildred, Managing Partner at Moore Thompson, said “It is important that businesses understand their responsibilities under MTD and are properly prepared by registering to report their information later this year when the first quarterly MTD VAT reporting period starts in July.
“Businesses that haven’t signed up yet shouldn’t panic but they should begin to take action now.”
HMRC has stated that they recognise businesses will require time to become familiarised with the new requirement, which is why they are offering an initial soft-landing period of up to 12 months for businesses to comply with the reporting requirements effectively.
In order to sign up to MTD businesses must complete the online HMRC form, which can be accessed here.
Under the new regime, businesses must use compatible software or specialist bridging programmes to record and report their data.
Mark added that HMRC is looking to launch MTD for other forms of taxation from 2021 at which point many more businesses will be affected by this extension of the rules.
“VAT is just the initial phase of MTD and many more businesses will need to comply with MTD on other areas of tax in future, which is why it is important that they seek out specialist advice in advance,” he said.
To help local business leaders gain a greater appreciation of MTD, Moore Thompson has prepared helpful resources, including a video on its website at www.moorethompson.co.uk/our-services/tax/making-tax-digital/