Small businesses are 56% more likely to overpay taxes due to VAT filing mistakes - than be fined for not paying enough
- Half of all UK small businesses have made mistakes when filing their VAT returns
- SMB owners spend 86 mins checking each VAT return, before filing to HMRC
- Just 1-in-4 (27%) SMB owners feel confident they’ve filed their VAT accurately
- QuickBooks creates new SmartScan™ software to check VAT returns in seconds
London (UK), 06 August 2019: New research shows small business owners spend 86 minutes checking their figures, before filing their VAT return to HMRC. Yet, more than half (51%) of small business owners have made mistakes when completing their VAT return and, this can often result in paying more tax to HMRC than required.
The independent study of UK small businesses, commissioned by Intuit QuickBooks, has identified a staggeringly low level of confidence amongst small business owners when it comes to filing VAT correctly. In fact, just 1-in-4 (27%) say they feel confident and that they have got everything covered and accurate when filing to HMRC.
With the Government’s Making Tax Digital (MTD) legislation meaning that at least 50% of VAT registered businesses will need to change the way they file their VAT returns, with a significant proportion having to radically alter their back office operations to remain compliant.
To help boost this confidence and make the process easier, QuickBooks has developed a unique new function within its accounting software suite called QuickBooks SmartScan™. It’s a free add-on tool that checks for the most common errors in VAT returns before they are submitted - to help avoid mistakes and increase confidence in the data submitted.
Mistakes can cost business money in the short term and significantly impact available and essential cash flow. Of those who made errors with their VAT return; 27% overpaid and (eventually) got money back from HMRC compared to 18% of small businesses that got fined because of their mistakes.
Chris Evans, VP and Country Manager at Intuit QuickBooks UK said; “There is a big move towards digital in the UK, in part driven by the new MTD legislation, but also due to the increased advantages technology can offer a business.
“At QuickBooks we’re constantly looking at ways we can help support small businesses; so I was shocked to find they were spending such a large amount of time checking figures manually ahead of VAT submissions and still didn’t feel confident about their final return. We needed to find a solution that was easy, quick and reliable.
“SmartScan is a great example of how digital innovation can not only save time, but also save the stress and worry around filing VAT returns, especially for those that are anxious about filing their first MTD submission this month.”
It was also found that upon filing their return, a third (35%) of small business owners feel relief that it is out of the way, but in spite of that; 19% still worry they have missed something and 18% are anxious they have made a mistake on the return.
QuickBooks SmartScan™ automates the most important key VAT checks, including; identifying duplicate expenses and invoices, inconsistent VAT tax codes, and cross checking highest value transactions. This advanced automation makes it simple for users to understand and address any potential errors so they get the most out of their VAT return.2
The new launch comes at a crucial time for small businesses, as many are adopting new processes and deserve confidence in how they file to HMRC in a MTD compliant way ahead of the impending 7 August deadline3. All businesses that are VAT registered and have a turnover of £85,000 or above must sign-up to the new scheme.
QuickBooks is a HMRC recognised provider of MTD compatible software and offers a suite of solutions to suit businesses, no matter how far they are on their journey towards digitisation. For example, the software includes free Bridging Software - designed to map to existing spreadsheets, ensuring MTD compatible filing using the company’s existing Excel or CSV files.
Visit the QuickBooks website (quickbooks.co.uk) for more information and to discover how QuickBooks SmartScan™ can help save time, boost confidence and make filing VAT even simpler.