We take a look at the state of MTD for VAT after the deadline for August returns.
YouGov’s latest poll figures indicate 32% of businesses are now on Making Tax Digital and ready for the change. But 12% said they haven’t heard of the MTD initiative. A total of 502 decision-makers from a small business with up to 9 employees were polled for the latest YouGov data.
Separate figures from UHY Hacker Young indicate that 3,680 businesses have missed the August VAT return deadline, with almost 600,000 businesses still to sign up.
When it comes to spending due to MTD, 27% of companies have purchased new accounting software to be compliant, and 28% reported that they are expecting to spend more money on their tax affairs.
Of the 54% of senior decision-makers yet to move to digital tax, a third (31%) report that they feel unprepared for the move and 46% of them have consulted or engaged an accountant to help them prepare.
Bridging solutions such as BTCHub help accountants accept their clients’ bookkeeping figures from their usual software and use BTCHub as a central VAT management system.
Making Tax Digital for VAT penalties
MTD for VAT was introduced for accounting periods starting on or after April 1st 2019. This means a majority of the 1.2 million affected businesses were due to submit their first quarterly return on August 7th. HMRC have already advised that they will not be issuing penalties for companies that missed the Direct Debit sign up, but there are no updates yet around penalties for missing the deadline for VAT returns.