The MTD digital tax-lag: are you behind the curve?
There are 1.2 million businesses that stand to be affected by MTD tax rules. At the start of July, nearly 75% of finance sector firms were yet to register for MTD. This number is daunting, as finance professionals scramble to register – and registration is non-negotiable.
If you have a VAT-registered business with a taxable turnover over £85,000, you are one of these 1.2 million businesses, and will need to sign up for Making Tax Digital.
If you’re not ready to submit via MTD come the 7th of August, you will be in a difficult situation. You will have to submit your first quarterly VAT return via software a mere week from now. (If you’re still looking accounting software able to complete complex accounts, consider PS Financials; we’re committed to making your transition to MTD as painless as possible.)
Confused? Register for our webinar, Your digital tax journey – Where are you? And what does it mean to be fully digital now and in the future?
Thankfully, and some would say predictably, HMRC are taking a ‘soft landing’ approach, which means they won’t be issuing penalties in the first year to businesses who are earnestly doing their best to comply. This means that, so long as you are doing your best to meet these new regulations, you should be saved from the wrath of HMRC.
If you still need to sign on for MTD, you will first need to create a Government Gateway user ID (if you don’t already have one). For this, you’ll need to have your VAT registration number, the date that you became VAT registered, the address where your business is registered for VAT, and the box 5 amount from your last VAT return.
If you’re already registered with a Government Gateway user ID, you can start registering for MTD now. First and foremost, you’ll need MTD-compatible software, such as PS Financials. The other requirements vary from business to business, and will also differ depending on whether you’re signing up your own business or a client’s business; you can visit the gov.uk website for the full list of requirements.
Once you’ve completed the online forms, you must wait until HMRC sends you a confirmation email before submitting your returns; this usually takes about 24 hours, but may take longer due to the currently large number of MTD submissions, so it’s recommended to start this process as soon as possible.
To get started right now, get in touch with PS Financials to discover our MTD-compatible financial software.