It feels like we’ve been talking about it forever but we’re now just a tiny distance away from the first ever quarterly deadline for digital VAT filing under the MTD regime.
That magic date is 7 August. Being so close now you would imagine that probably at least 90% of businesses affected by the changes would have put everything in place and be signed up.
You’d be wrong. That was confirmed the other day when Theresa Middleton, Director of MTD at HMRC, revealed the latest figures.
Turns out that a staggeringly high number of businesses in the finance sector are yet to register. In fact, finance firms were highlighted as one of the slowest, with 3 in 4 not MTD registered – at the time of the announcement – with just 27 days to deadline.
You may also be surprised to hear that businesses in the agriculture sector (such as farmers) have been one of the fastest groups to sign up, with 50% already registered.
Overall, more than 600,000 businesses have signed up. So that means about half have not. There are 1.2 million businesses affected by the MTD rules (those with an annual turnover above £85,000).
Around 400,000 submissions already successfully made using software. About 10,000 businesses registering for MTD every day.
Why are more not ready? It could be the same issue we’ve been hearing about. That’s to do with confusion over the registration process. Our team has been hearing the same story from accountants that they’re somewhat baffled by the order things have to be done and how.
For anyone in that boat, we’ve got your help for you in the form of the Keytime agents set up guide. This will steer you in the right direction, showing you the essential, easy steps you can take to ensure MTD compliance. We’d recommend reading it in full here.
What else is worth looking at in the latest HMRC news release?
Firms were told that, if paying by Direct Debit, they should register at least 7 working days before a return is due. If not paying by Direct Debit, they can register at least 72 hours (three days) before their return is due.
HMRC also made a point of reminding businesses to be using MTD-compatible software. Of course, Keytime customers are already covered on that front.
Officials said businesses must make sure that their last pre-MTD Direct Debit has come out of their bank account before signing up.
Ms Middleton emphasised that her organisation will be adopting a soft landing approach to the early days of MTD.
She said: “During this first year we won’t be issuing filing or record keeping penalties to businesses doing their best to comply.”
But that last part is surely the most important. Needing to do their best to comply means that businesses can’t afford to leave it any longer to get registered.