HMRC has confirmed that 75% of businesses in the financial sector still haven’t signed up to the government’s Making Tax Digital (MTD) before the August 2019 deadline – the highest percentage for any business sector.
Any companies with an annual turnover above £85,000 which have not already signed up for MTD are being urged by HMRC to do so before the 7 August 2019 VAT filing date.
The MTD rules became law for VAT periods starting on or after 1 April 2019. This necessitates that most VAT-registered businesses with taxable turnover over £85,000 to keep their VAT records digitally and to submit their VAT return direct from MTD-compatible software.
John McCaffery, partner at Manchester-based chartered accountants, Alexander & Co, who is helping many companies in the sector prepare for the move to MTD, said: “HMRC estimate that 1.2 million businesses in the UK are affected by the MTD rules, which became law for VAT periods starting on or after 1 April 2019. Most of these will be required to submit their first quarterly VAT return to HMRC by the 7 August 2019 digitally. If paying by Direct Debit, online registration must be by 29 July 2019.
“With circa 20,000 businesses in the financial and real estate sector in the North West, a significant number of companies in the region need to act fast. In other sectors, at least 50% are also yet to register. It is imperative that businesses that need to, take advice as soon as possible. This will help avoid any sanctions that HMRC may apply in cases of perceived deliberate non-compliance.”