With only six months to go until the Government's plan to bring the UK's tax system into the 21st century comes into force, Lincolnshire-based accountants and business advisors Duncan & Toplis is urging business owners in the East Midlands to take steps to prepare before the deadline.
From 1st April 2019, VAT registered businesses with turnover higher than the £85,000 VAT threshold will have to keep their records digitally for VAT purposes rather than on paper. This will include filing quarterly VAT returns online and maintaining accurate and up-to-date financial information throughout the trading year.
However, the outcome of recent analysis from RSM and YouGov has revealed that a third of businesses across the UK have made little to no progress to make the move towards digitalising their taxation process.
Paul McCooey, director at Duncan & Toplis said: “Many businesses simply aren't aware that these changes will impact the way they work, so it's important that business owners are doing their research now.
“Although businesses in the East Midlands aren't any further behind than others across the UK in the run up to the Making Tax Digital deadline, they do face unique challenges such as rural working locations and broadband connectivity which may explain a slower uptake in some industries.”
The need for a strong broadband connection has been cited as one of the reasons that businesses are reluctant and concerned about the move from paper to online platforms, as Lincolnshire Broadband Programme Manager Steve Brookes explains.
“Many businesses in Lincolnshire and the East Midlands are located in rural areas that don't benefit from the same level of internet connectivity that businesses in cities do. However the kinds of MTD compatible platforms that businesses are required to use by April, which must include an Application Programme Interface, are simple and can be accessed easily by anyone.”
Businesses will benefit from a soft landing period between April 2019 and April 2020 to adjust to the taxation changes, with no financial penalties for record keeping failures. However, there must be an API that creates links between a company's software and HMRC from the outset.
“Although the transition might include growing pains, the transformation in six months' time will bring a lot of benefits to businesses of all sizes, from saving time to ensuring they have up to date and accurate information to make better business decisions,” Paul added.
“Many businesses are still unsure what Making Tax Digital means for them and it might feel like a daunting task. Our team of MTD experts are on hand to offer advice for anyone wanting to make the most of the six months ahead.”