Making Tax Digital – What’s Happening?
The HMRC march towards the UK tax system being fully Making Tax Digital (MTD) operational continues at pace despite the ‘red flags’ being raised that small businesses and those UK taxpayers with smaller tax compliance needs will just not cope without time to adjust – particularly given the HMRC stated aim for quarterly MTD Tax Returns.
As many tax and accountancy practices have already pointed out they are very concerned that their clients are not equipped to dealing with digital records and returns – they have enough difficulties with those clients maintaining the necessary adequate paper records!
However, MTD is clearly here to stay but perhaps the pace towards MTD for the UK taxpayer with smaller tax compliance needs can be slowed!
As it is the implementation of MTD is in practice being quicken by HMRC and not slowed! This is shown by the fact that the next stage for MTD is not due until from 1 April 2022 when all VAT registered businesses are statutorily required to use MTD.
Currently, those businesses that have registered for VAT voluntarily can stay outside of MTD. However, the HMRC’s zealousness for speeding up the implementation of MTD has meant that as from 1 April 2021 it is to change its system by closing its portal website via which VAT businesses not using MTD can file their VAT returns. Those VAT businesses affected by this HMRC change should be looking online at their HMRC Business Tax Account regarding how they should log in and file to HMRC your VAT Returns as from 1 April 2021 under MTD – not 1 April 2022, as you thought would be the case!
Given the above HMRC manoeuvres to advance MTD, if you have an accountant that deals with your VAT Returns then they may require you to move over to their MTD compatible accounting software a year earlier than you thought.
Here at HaesCooper we can help you with your UK fiscal requirements whether you are a small, medium or large business. To discuss your needs or to learn more, contact us.
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