Insolvencies climb, inflation soars, can UK businesses survive?
After the shocks of Covid, Brexit and now the war in Ukraine, can the UK economy get through a period of high...READ MORE
Businesses with an annual turnover above £85,000 are being urged by HM Revenue and Customs (HMRC) to sign up to Making Tax Digital before the 7 August VAT filing date.
The HMRC has issued a reminder to the 1.2 million businesses affected by the MTD rules, which became law for VAT periods starting on or after 1 April, that they will be required to submit their first quarterly VAT return to HMRC using software by the 7 August. If paying by Direct Debit, these businesses must register by Monday 29 July.
MTD was first announced in 2015 and will make it easier for businesses to get their tax right, reducing tax lost due to avoidable mistakes.
At the moment around 10,000 businesses are registering for MTD every day, while more than 600,000 businesses have signed up in total with some 400,000 submissions already successfully made using software.
The HMRC revealed that businesses in the agriculture sector (such as farmers) have been one of the fastest groups to sign up to MTD with 50 per cent already registered, while the financial sector has been one of the slowest to register with nearly 75 per cent yet to sign up.
“Now is the time for businesses with an August quarterly filing deadline to sign up and join the hundreds of thousands already experiencing the benefits of MTD," said Theresa Middleton, director of Making Tax Digital at HMRC.
The HMRC, Ms Middleton confirmed, will not be issuing filing or record keeping penalties to businesses doing their best to comply during this first year.
HMRC expects MTD to reduce tax lost due to errors, thanks to the improved accuracy that digital records provide and the fact that information is sent directly from software to HMRC. The latest tax gap figures showed avoidable mistakes cost taxpayers more than £9.9 billion last year – £3 billion attributable to VAT alone.