MTD Update – the future is most definitely digital

30th September 2019

We are fast approaching the final deadline (7th October) of HMRC’s staggered process, which started in April 2019, by which VAT-registered small business owners with a taxable turnover above £85,000 must register for MTD (Making Tax Digital) and submit their quarterly VAT returns online using MTD-compliant software.

Although HMRC has promised not to penalise those still struggling to comply with the new rules, 120,000 TV licence-style warning letters have gone out to those VAT-registered small businesses that missed the August deadline. There may not be fines issued in this, the first year after implementation, but HMRC is committed to pushing forward the digitalised agenda and see these letters as part of a series of “communications to encourage those remaining businesses to join the 1.1 million who already have signed up”.

HMRC has reported that almost all (94%) businesses complied with the legislation to submit VAT returns before both the first and second stagger deadlines. Read more here.

But it is clear that some businesses are not yet digitally ready, not just for VAT but for the prospect of personal tax self-assessment and corporation tax self-assessment in the next two years. This regulation may have provided many businesses with the impetus for digital transformation but there are still some who are simply not prepared.

If you would like some help to get your business digitally ready, please contact partners Rachel Skells or Michael Greene.