HMRC Last Warning on Making Tax Digital
HMRC has urged businesses that will be affected by Making Tax Digital to submit their first quarterly return using approved software by 7 August.
Under the new rules, which came into effect on 1 April, businesses with an annual turnover over £85,000 need to and submit a quarterly VAT return before the 7 August filing date.
Businesses that wish to pay by direct debit will need to register by Friday 27 July.
First announced in 2015, Making Tax Digital promises to reduce mistakes and make it easier for businesses to pay the right amount of tax by using software to record and submit taxes digitally.
Using approved accounting software like FreeAgent and Xero could help avoid honest mistakes that ended up costing taxpayers more than £9.9 billion last year.
HMRC estimates that around 1.2 million businesses will be affected by the Making Tax Digital for VAT changes. But this week they revealed that only around 600,000 have so far signed up for the scheme, with only 400,000 having already made submissions.
Currently, around 10,000 businesses are registering for Making Tax Digital every day with firms in the agricultural sector registering fastest and companies in the financial sector registering the slowest.
Theresa Middleton, Director of Making Tax Digital for VAT at HMRC, said: “Now is the time for businesses with an August quarterly filing deadline to sign up and join the hundreds of thousands already experiencing the benefits of Making Tax Digital.
“During this first year we won’t be issuing filing or record keeping penalties to businesses doing their best to comply.”
Miles Grady, Director at Cloud Accountant, said: “Time is running out for businesses to sign up to Making Tax Digital. Not migrating to cloud based accounting software now will only create more work in the future.
“Although HMRC says that they will be lenient with first timers, I know most businesses won’t want to leave it to chance when it comes to dealing with the taxman.”
Want to learn more about Making Tax Digital? Find out more about our approved software and accountancy packages today. Call: 0808 281 0303.