HM Revenue & Customs (HMRC) has warned that registration for Making Tax Digital (MTD) for VAT will take up to seven days to complete and will not be a real-time service. Continue reading HMRC reveals MTD registration takes seven working days
All businesses that fall under the MTD for VAT regulations from 1 April 2019 will be required to register on HMRC to be able to submit through MTD compliant software.
We are recommending clients do not register until they have submitted their final VAT return under the existing system. Once registered you cannot submit through the old nine box route.
For example a business with a March quarter return which is due on 7 May 2019, should not register until they have submitted this to HMRC. If they register for MTD for VAT in early April before submitting the March return, HMRC would expect this return to be submitted through MTD compliant software instead of the nine box input screen. Therefore it is crucial to consider the timing of when you register.
The registration process from point of submission to confirmation can take up to 72 hours, as HMRC have to switch your VAT registration from the current VAT mainframe to the new Enterprise tax management platform, which we understand is a manual process.
The Lords Economic Affairs Committee says the Government need to listen to small businesses and delay the rollout of Making Tax Digital for VAT programme by at least a year.
Recently, the House of Lords’ Economic Affairs Committee has called for HM Revenue & Customs (HMRC) to halt the deployment of its Making Tax Digital for VAT programme.
A report conducted by the committee found that small businesses are unlikely to be ready for April 2019 and as a result, HMRC must begin to listen.
“Nearly 40 per cent of affected businesses have not heard of Making Tax Digital, let alone have started to prepare for a substantial change to their accounting processes,” the report said.
“HMRC is alone in its confidence that all one million businesses will be ready for Making Tax Digital for VAT in April 2019. They have underestimated the time for research, planning, training and system changes that some businesses will need.”
The Economic Affairs Committee report highlighted that HMRC must treat small businesses fairly, and the April 2019 deadline could lead to “unjustifiable risks” for businesses.
The committee also raised concerns about the software required by businesses to comply with the programme, emphasising that there had yet to see any free software products offered by HMRC.
The committee explained: “The emerging software market appears difficult to navigate. It is unfair to expect businesses to make choices about their accounting software without a better understanding of the future Making Tax Digital regime.”
Committee Chairman, Lord Forsyth said HMRC had “neglected its responsibility to support small businesses” by implementing the programme.
“Small businesses will not be ready for this significant change to their practices if it is introduced on 1 April, particularly with Brexit taking place three days earlier. The Government must delay its introduction.”
The committee has recommended that instead of making the programme mandatory from April, HMRC should allow businesses to join on a voluntary basis for at least a year. This ensures companies are ready, but also it allows the software market to develop and ensure that the department’s systems are “fully and appropriately tested”.
Lord Forsyth said: “Making Tax Digital for VAT will make life even more difficult for small businesses, given their scarce resources to devote to preparing for the change. If HMRC insists on mandating Making Tax Digital for VAT, it has a duty to support small businesses with its implementation. So far, HMRC appears to have neglected this duty.”
The Government is urging SMEs make use of a scheme that can earn them a £2,500 voucher towards the installation of fibre optic broadband. Continue reading SMEs urged to claim broadband vouchers
With Making Tax Digital (MTD) for VAT due to be rolled out in less than six months’ time, Lords have warned that there is “overwhelming evidence” indicating that businesses are still “under-prepared.” Continue reading Lords committee warns of “huge under-preparedness” ahead of Making Tax Digital
HM Revenue & Customs (HMRC) has this week opened a pilot scheme for Making Tax Digital (MTD) for VAT – the first phase of the Government’s digital tax reporting overhaul. Continue reading Making Tax Digital for VAT pilot launched by HMRC
Howard Worth are officially a Xero Platinum Partner after starting their relationship with the software provider in 2009.
Xero partnership, helping to assist clients with the move to digital accounting.
Through the Platinum Partner status, Howard Worth are able to assist clients with the move to this digital accounting platform as well as ensuring Making Tax Digital compliance.
Xero is a cloud based software which allows users to access their accounts anytime, anywhere, with real time results on a large range of smart devices including tablets and phones. Our in-house Xero certified advisors are available to help clients to set up Xero and offer support and guidance using the software.
From the 1st April 2019 all businesses who are VAT registered with a turnover over £85k will need to use the government’s new Making Tax Digital system to submit their VAT return on a quarterly basis.
If you have any questions around MTD or the Xero software – please contact us on 01606 369000 or email firstname.lastname@example.org
HM Revenue & Customs (HMRC) has published three important new documents regarding its flagship Making Tax Digital (MTD) project to help clear up confusion among businesses. Continue reading New Making Tax Digital updates published by HMRC
Almost half (41 per cent) of small business decision-makers are ‘unaware’ of Making Tax Digital (MTD), new research reveals. Continue reading Almost half of SME bosses still ‘unaware’ of MTD