Hexham-headquartered Hansen Partnership acquired by Navint
November 23, 2021
HM Revenue & Customs (HMRC) has urged VAT-registered businesses to sign up for Making Tax Digital (MTD) for VAT to “save time and reduce errors”.
The notice comes before the digital scheme becomes mandatory for all VAT-registered businesses from 1 April 2022.
The latest statistics suggest that almost 1.6 million businesses are now registered for MTD for VAT, with more than 11 million digital VAT returns submitted successfully using MTD-compliant software, such as Xero or QuickBooks.
Around seven in 10 (69 per cent) businesses reported at least one benefit from the new system, such as “preparing and submitting returns faster” and “increased confidence that they were getting tax right”.
A similar number (67 per cent) said MTD had reduced the potential for mistakes in at least one aspect of the record keeping, preparing, and submitting returns process.
But until April, only VAT-registered businesses with a taxable turnover that exceeds the VAT threshold (currently £85,000) are required to sign up.
Commenting on the changes, Joanna Rowland, HMRC’s Director General for Transformation, said: “By signing up for Making Tax Digital, we expect most businesses to experience long-term benefits, including reduced errors and time saved in managing their tax affairs.
“We encourage businesses to explore digital record-keeping for their VAT affairs and use this time to choose the right software to support their business needs.”
Mike Cherry, FSB National Chair, said: “We have worked hard to ensure Making Tax Digital launch dates were adjusted to give small businesses more time to prepare and allow more competition to open up in the accounting software market. It’s important that firms do all they can to get ahead of deadlines and access the affordable platforms that are now available; if they are members of FSB, they will have access to a new easy Making Tax Digital member service that we are creating.”
For advice and support around the Making Tax Digital initiative and all other aspects of business taxation, please contact Stephen Slater or Paul Gainford at RMT Accountants & Business Advisors on 0191 256 9500 or via the contact us form.