Making Tax Digital - Again!
Over the last 12 months businesses have been preparing themselves for Making Tax Digital for VAT and most now have the appropriate software in place to
file the returns directly with HMRC through new Making Tax Digital compatible software. Unfortunately, it doesn’t end there!
The end of the ‘soft landing’ period in April 2020 means businesses must also comply with the requirements to have digital links in place and be ready to face penalties if they don’t!
Businesses will need to integrate their systems
As of April 2020, the transfer of data between functional compatible software must be made using digital links, meaning no manual inputting, or error correction in spreadsheets. This will especially impact businesses with multiple accounting systems. To comply, they will need to integrate their systems.
The start of penalties!
The end of this soft-landing period also means that penalties can now kick-in. These are based on the number of offences in the last 12 months and are on a cumulative basis. Penalties range from 15% of the VAT due to 100% of under declared VAT (as a result of careless or deliberate inaccuracies).
Need extra time?
Businesses with complex or legacy IT systems may require longer to put digital links in place. These businesses can apply to HMRC for additional time to implement these links. If your business qualifies then the additional time will be granted as a specific direction from HMRC.
These changes will affect over one million VAT registered businesses. If you would like more information on integrating your accounting systems please contact our Cloud Accounting & Business Outsourcing Manager, Sarah Smith, on the details below:
Cloud Accounting & Business Outsourcing Manager
direct dial: 01942 292527