HM Revenue & Customs (HMRC) has published a Making Tax Digital (MTD) ‘Mythbusters’ helpsheet to clarify the current situation regarding businesses and MTD.
Most businesses who are above the VAT threshold are required to keep their financial records digitally, as of 1 April 2019.
The aim of the factsheet is to clarify common myths that are associated with MTD.
Businesses don’t know that MTD is happening or what to do
The guidance states that in December 2018, 83 per cent of businesses had already started preparations for Making Tax Digital, as well as every firm being written to by HMRC.
HMRC also state that eight in 10 businesses were aware of MTD back in December.
Everyone affected needed to join the service by 1 April 2019
Companies are required to join Making Tax Digital and submit their VAT returns digitally for the first VAT period, which begins either on or later than 1 April.
For businesses that file their returns quarterly, their first digital VAT returns under MTD will not be due until August or later.
However, firms do need to have signed up for MTD, as well as keeping their records digitally under MTD compliant software in order to send their information, before they file their first return under the new system.
HMRC will penalise me if I get the new process wrong
HMRC say that they recognise that it will take businesses time to become familiar with the new requirements relating to Making Tax Digital.
They also say that they will be taking a “light touch” approach during the first year of the digital system, clarifying that they will not be issuing record keeping and filing penalties when a business is doing their best to comply with the law.
HMRC has clarified a number of other common MTD concerns, which can be viewed at http://bit.ly/2S6Etqf
Accountants in London
Latest posts by Accountants in London (see all)
- Government announces £10 million tourism rescue package - July 8, 2020
- COVID-19: Government set to introduce Stamp Duty holiday - July 7, 2020
- Treasury extends VAT cut on PPE until October - July 6, 2020