Making Tax Digital – VAT compliance

Hopefully you will have heard about HMRC’s initiative Making Tax Digital (MTD). The first stage in this initiative covers VAT reporting.

From April 2019, VAT-registered businesses with turnover above the threshold and any below the threshold that want to register voluntarily, will need to keep digital records for VAT and submit VAT returns using MTD compatible digital systems only.

Nicola Roby, Director at CHW Small Business Accountants Bolton explains further, and highlights why all VAT registered businesses should be talking to their advisers now to ensure they will be ready for MTD for VAT requirements by 1 April 2019.

I already submit my quarterly returns online – does this make me MTD compliant?

For a long time businesses have been required to file quarterly VAT returns electronically to HMRC and whilst 99% of VAT returns are currently filed online, only 15% are submitted via software.

Simply, what this means is that whilst the majority of businesses are using the government gateway service to file VAT returns, they are manually uploading information.

If your business is filing VAT returns in this way then NO, you are not MTD compliant and indeed, this service of manually uploading information will cease to be available for the majority of businesses when MTD comes into force.

Recent Survey

A recent survey of 1,100 businesses by the British Chambers of Commerce survey found a “widespread lack of awareness among business communities about the switch to a new digitised system.”

Worryingly, the survey found that 24% of firms have no knowledge of MTD whatsoever, while a further 66% either had only basic knowledge of it, or knew it just by name.

Even of those businesses which are aware of the scheme, very few are preparing for it and according to the report, just 25% of those firms who know “a lot of details” about MTD have made plans for its implementation.

Nicola commented ‘April 2019 is fast approaching and it is worrying that such a large number of businesses are not preparing for the new regulations.

‘Keeping records digitally can have a wide range of other benefits for businesses and we work closely with business owners to find the software solution which works best for them.’

If you are not already talking to your accountant it is now time to do so. To discuss this or any other aspect relating to your small business finances contact the team at CHW Small Business Accountants Bolton now on 01204 534031 or via our contact us page.


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

DID YOU FIND THIS USEFUL?

Share it with your network:  

Want more great content?
Sign up to our newsletter

Follow us

Tweets by @CHW-accounting

CHW-Accounting
@chw-accounting


Twitter: chw_accounting

Read enough?

Want to find out how we can help you and your business? Get in touch today and let's have a chat.

WHAT'S THE NEWS?

Grab a biscuit and a brew and read our latest news.

4 July 2019

VAT Reverse Charge

by

With a major shake-up in the treatment of VAT in respect of building work is imminent – our Senior VAT Manager, Carolyn Van Hecke, highlights the implications for those in the construction industry and why it has never been so important to apply the correct VAT treatment.


Read more >

20 May 2019

How long must I retain my books and records?

by

HM Revenue and Customs ( HMRC ) may check your records to make sure you’re paying the right amount of tax, but how far can they go back & how long should you keep business records?


Read more >

12 April 2019

Claiming back VAT on a vehicle purchase

by

You can usually reclaim the VAT paid on goods purchased for use in your business. However, with vehicles these often include an element of personal or private use. We explain the rules regarding reclaiming VAT on vehicle purchases.


Read more >

1 April 2019

Loans to employees – what you need to know

by

Whilst a business is perfectly entitled to loan money to employees or relatives, there can be tax implications if it does.  Here’s our brief reminder of those implications.


Read more >

28 March 2019

Guide to Payroll Changes from April 2019

by

If you are an employer there are several payroll changes which come into effect from April 2019 of which you should be aware.


Read more >

YOUR CHALLENGES

No matter what your challenge is, we’ve probably dealt with it before.



Need an Accountant?

Get in touch >


Need an Accountant?

Get in touch >


Tax issues?

Find out more >


Tax issues?

Find out more >


Trying to grow your business?

We can help >


Trying to grow your business?

We can help >


Managing cashflow?

We can help >


Managing cashflow?

We can help >


Starting a business?

We can help >


Starting a business?

We can help >


Looking for funding?

Need help with funding? >


Looking for funding?

Need help with funding? >


Buying or selling a business?

We can help >


Buying or selling a business?

We can help >


Adopt the cloud?

We can help >


Adopt the cloud?

We can help >


What else can we do for you?

We can help >


What else can we do for you?

We can help >
CONTACT US

Get in touch, no hard sell, just a brew, a biscuit and a chat.