• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • About
  • Contact

Daily Business Magazine

A magazine complement to the Daily Business website

  • Life, Arts & Leisure
    • Creative
    • Festival
      • Festival Reviews
    • Film
    • Food & Drink
    • Stage Shows
    • Life
    • Leisure
      • Rio Recommends – dog walks and cafes
    • Homes
    • Style
    • Travel
  • Opinion
    • Bill Magee
    • Craig Alexander Rattray
    • Karen Harvie
    • Keith Anderson
    • Russell Dalgleish
    • Terry Murden
  • Interviews
  • Notebook
  • Working Life
    • Careers & Management
    • Finance and legal
    • Technology
      • Tech Talk
    • Well Being
  • Daily Business News
    • All Content

VAT registered? Be prepared for the next big change

February 20, 2019 by a Daily Business Contributor Leave a Comment

Making Tax Digital

Ross BoydIf your business is VAT registered you need to be aware of a new system from 1 April, says Ross Boyd

______________________________________________________________________________

We’ve known for years that it is coming, so I was shocked when I recently discovered how many firms are still completely unprepared for the major shift in April in how the Government collects taxes from hundreds of thousands of businesses across the UK.

In a meeting with fellow accountants before Christmas, the discussion turned to Making Tax Digital (MTD), the initiative by HMRC to “revolutionise” the UK tax system and ultimately bring an end to self-assessment. 

Though target dates for moving smaller firms and the self-employed onto MTD have been pushed back, the Government’s ambition to simultaneously increase its tax take while cutting down on costs has not changed. Digital is still coming, and from 1 April, all VAT-registered businesses in the UK are required to file their data through approved software that links directly to HMRC’s computer systems.

At that meeting representatives from 80% of the accounting firms on hand said their organisation was not yet ready for MTD. Words like “disaster” and “chaos” were used. 

These are the professionals often asked by clients to be providing advice to the businesses that will ultimately be held accountable by HMRC for any failures to comply with the new system. But if accountants aren’t prepared, which chance do their clients have?

With offices in Belfast, London and Glasgow, we work with businesses throughout the UK, using the latest technology to help our clients make informed business decisions that improve profitability. This also means that virtually all of our clients are operating on cloud-based accounting systems that have them fully prepared for MTD for a number of years.

Unfortunately, that isn’t the case everywhere – and the situation I have described at my recent meeting of a group of accountants seems to be widespread across the country. In Scotland, I wouldn’t be surprised if half of this country’s VAT-registered firms, some 170,000, are fully-equipped to handle the new requirements being imposed by HMRC. 

It would be easy to explain this away as a problem affecting only the smallest businesses being served by the smaller accountancy firms, but we are aware of examples that is not the case. For example I know of at a least one business generating as much as £100m in annual turnover, and which is looked after by one of the largest firms, that has yet to get its MTD house in order.

The issue here is often one of failing to fill in the gaps. Those bigger businesses have their own in-house financial teams. The external accountants might assume the internal team has taken the lead on MTD, while the internal team awaits guidance from their professional advisors, in what can involve complex systems.

Where the fault ultimately lies will not be among HMRC’s concerns. The business itself will be held responsible for any non-compliance, and will bear the cost of ensuing fines and penalties. 

For some, there might just still be enough time to act before the new system comes into operation. Contractors who issue just one or two invoices per month, for instance, could likely get the necessary software embedded within a few days.

But quick fixes will be much harder to come by in fields such as the legal sector, where Ross Boyd Ltd works with a large number of clients. The intricacies of billing for legal work make it unlikely that a new software system could be selected and then made fully operational in less than three months.

In past periods of transition by HMRC, there has typically been a “window” or “soft landing” when it holds off on issuing penalties for a limited period of time. Those who fail to make the MTD deadline in April will hope for the same to happen again, but that is not a given. Either way, the time to act is now.

Ross Boyd is Director of Ross Boyd Ltd international business consultancy

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)

Related

Filed Under: Working Life Tagged With: Making Tax Digital, Ross Boyd

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar



Editor’s Pick

Reston Station

Reston back on track after half a century

Julena Drumi

… [More...] about Reston back on track after half a century

Angus Grossart

Obituary: Sir Angus Grossart

Terry Murden

… [More...] about Obituary: Sir Angus Grossart

Terry Murden

Late call to replace Lord Smith | SNIB and the bottle bank

Terry Murden

… [More...] about Late call to replace Lord Smith | SNIB and the bottle bank

Edinburgh-Park-Tapestry-with-Celia-Joicey-Director-Dovecot-Studios

Weaving culture into Edinburgh’s office life

Julena Drumi

… [More...] about Weaving culture into Edinburgh’s office life

Advertising



Footer

  • All Content
  • Site Map
  • Privacy Policy
  • Facebook
  • Twitter
  • Instagram
  • Email
  • LinkedIn
  • WordPress

Copyright © 2022 · Design by jPAD Consulting · Magazine Pro · Genesis Framework

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT
 

Loading Comments...