Are You Aware of Making Tax Digital?
According to recent statistics, 40% of UK small business are blissfully unaware of the Government’s Making Tax Digital (MTD) plans.
With three months until the go-live date in April this year, that is a worrying figure. While 1.1 million business are set to fall under the scope of MTD for VAT, that equates to 440,000 businesses still in the dark.
With the consensus of many accounting firms being that an average conversion to cloud-based software takes between 8 – 11 hours, it leaves a lot of work to be done between now and next year.
HMRC is currently working with 150 separate software companies who plan to have MTD compliant software in place ready for the deadline. While they also acknowledge that bridging software will at times be necessary at least in the beginning. “Bridging software” is HMRC’s term for a digital tool that can take information from other applications, for example, a spreadsheet, and allow the user to send the required information digitally to HMRC in the correct format.
With over 400,000 companies unaware of the governments MTD timescale, it is clear that accountants need to help prepare their clients for the changes fast approaching.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.