Ten percent of business missed their first Making Tax Digital deadline in August*. With another deadline around the corner in October, we take a look at why businesses aren’t embracing the new rules, and how to make complying with MTD easier.
Why businesses are falling short of MTD
Of the 1.2 million businesses that need to comply with Making Tax Digital, 120,000 missed their first VAT deadline on 7 August by failing to sign up in time. While HMRC won’t fine these businesses, it shows owners are having problems with the new regulations.
MTD is proving to be complicated for business owners. There is a fundamental misunderstanding about the need to sign up for Making Tax Digital. Meanwhile, companies are voicing concerns online that the new regulations will be expensive when buying compliant software, and submissions will be difficult in comparison to the previous process.
A member of support staff at Bokio accounting software, says “We have found that people haven't registered for MTD because they don’t understand why they need to register for something mandatory. We try and make this as easy as possible by giving them resources to help them through the process.”
Making Tax Digital for Income Tax
Making Tax Digital for VAT is just the start of potential new online tax rules, as HMRC are currently trialing MTD for Income Tax too. The regulations won’t come into force before April 2020, and a date is yet to be set. But, when they do it will affect everyone who is self employed. Some below an income threshold will be exempt, but the amount hasn’t been specified yet.
How the right accounting software can help
With a free and easy to use accounting software, business owners and accountants can be Making Tax Digital compliant without the hassle.
CEO of Bokio, Viktor Stensson, says, “Digital accounting doesn’t have to be hard when you use the right software. With Bokio, your accounting is automated, so you save time and money, and don’t have to worry about incorrect calculations. We want to help small business owners be MTD compliant for free, because we know every penny matters.”
Save time and money submitting a VAT return
Bokio is more than just a way to submit your VAT return. Smart templates make recording transactions quick and simple. There’s also an invoice generator to create, send, track and record invoices in the same place as the rest of your accounting, and get notifications if they go overdue. Plus, there’s automated reporting to stay in control of your finances.
We're changing the world of accounting forever. Bokio is a smart solution that helps small businesses and sole traders grow their company and profits. Powered by AI, we will help you do your bookkeeping, create, send and track invoices, and file your VAT return - all for free.