HM Revenue & Custom have quietly slipped out new guidance shortly before the next major deadline in the timeline in the Making Tax Digital (MTD) rollout. For the uninitiated, MTD is a UK Government scheme that has a “vision” in which the tax administration system for UK taxpayers and businesses alike is more efficient and even simpler for taxpayers to navigate. The new guidance surrounds confirmation notices from HMRC in a post-MTD environment and charges for late filing.
What’s It All About?
This is because all VAT-registered businesses who are over the £85,000 VAT threshold now have to file VAT returns using digital platforms like QuickBooks. However, thanks to registration woes and a surge in demand, HMRC have backtracked on late fees/charges for this initial rollout period. This leniency is due to the fact many businesses have yet to even register for Making Tax Digital HMRC services via a digital platform like QuickBooks.
The new MTD guidance, published this week, has found that anyone who uses an accountancy package – like QuickBooks – to connect with HMRC to do VAT return filing will only receive a “confirmation notice” from the software platform provider and not directly from HMRC – this new guidance makes it clear that in terms of confirmation notices, Making Tax Digital means digital confirmation notices from the platform provider only!
Nearly 1.2 million businesses will after the 7th of August 2019, have to use digital platforms like QuickBooks in order to make VAT returns as the latest deadline passes for MTD. According to HMRC 800,000 businesses have registered for Making Tax Digital. HMRC believes over 1.2 million businesses will have to use this new service and according to media reports, HMRC is getting 10,000 new businesses signing-up every day!
Why Is The Government Doing This?
The drive behind this new MTD rollout is also due to lost revenue. The government’s own data highlights the stark issue in question – with £9.9 billion lost due to “avoidable errors” or which over £3 billion is liked to VAT collection. This new drive will help the Government collect more taxes. The leniency and notice guidance are teething issues related to the wider rollout.
If you are unsure about Making Tax Digital or have questions about MTD and how it could affect your business, why not get in contact with Prestige Business Management today? Call us on 0203 773 2927 to talk about Making Tax Digital today?