Written by: Keith Tully
Reviewed: Wednesday 23rd January, 2019
A very sizeable minority of UK companies are not yet ready to comply with HMRC’s rule changes relating to its ‘Making Tax Digital’ initiative.
HMRC wants to make Britain’s tax regime much more efficient through digitisation but recent polling suggest that there is widespread unpreparedness among businesses nationwide.
There is a deadline for Making Tax Digital compliance set for April 1st 2019 which relates to all VAT-registered businesses with a taxable turnover above a certain threshold.
However, a recent survey by the software provider Advanced suggests that only 57 per cent of companies that ought to be ready to comply with the new rules are actually in a position to do so.
That leaves a large number of businesses potentially unprepared for the April 1st deadline and Advanced has said that 35 per cent of respondents to its polls couldn’t actually say whether they were in a position to comply with the new rules or not.
HMRC has estimated that a successful transition to a digital tax system will save the UK Treasury in the region of £9 billion a year by virtue of being so much more accurate and efficient than the systems that have so far been relied upon.
As a software provider Advanced is optimistic about the benefits of the Making Tax Digital initiative but wants to see more support being given to businesses as they figure out how to comply with HMRC’s new digital tax regime.
“The government is right to implement initiatives that mean organisations need to become more digital but our research suggests that not enough support is being given to help them prepare,” said Jon Wrennall, Advanced’s chief technology officer.
“However, this responsibility doesn’t fall to the government alone,” he added. “Suppliers approved by HMRC to support Making Tax Digital need to offer ongoing support too, as well as provide software that is accessible and user-friendly – otherwise businesses will continue to hold back or make errors.”
HMRC has said that it will give businesses a “soft landing” period of 12 months after the April 1st Making Tax Digital deadline during which they will need to fall into line with the new rules but will not be fined for non-compliance.
17th April 2019
HMRC applied to see more than 4,000 UK companies closed down over the course of 2018 and is being too aggressive in its pursuit of tax-related debts.Read More
12th April 2019
British high streets saw the sharpest rate of net store closures on record over the course of last year, according to a new set of figures.Read More