Since its first announcement, there have been groups calling for the delay of Making Tax Digital and a recent report from the British Chamber of Commerce states 24% of businesses have still never heard of MTD.
So will it be delayed? If you’re here hoping we’re going to say yes, well, that’s not the case but hopefully we can show you why it’s a good thing for business that as far as we can see, it’s full steam ahead.
Firstly, if you’re one of the 24% who still isn’t sure what Making Tax Digital is, grab a coffee and catch up here.
Why might it be delayed?
Change for business owners can be scary, we get that. We can understand why some might want to delay the roll out of MTD for VAT.
Let’s face it, there are enough things to think about like whether to hire a new team member, can you afford that new scanner, should you go back to the same place for the Christmas party…the important stuff. When HMRC announce that they are going to change the way you deal with tax it can be quite daunting.
With the change due to take place in April 2019 some feel there isn’t enough time to prepare. We know deadlines can seems scary, they can seem unfair but they also focus attention. Necessity is the mother of invention. That’s why we believe there shouldn’t be any further delays for MTD for VAT.
That to-do list never goes away and so delaying the MTD deadline will only keep it low down the list.
But that’s our opinion, so why might HMRC want to keep their deadline? For business owners, the move from the current VAT system to MTD is probably the smallest change when compared to Income and Corporation Tax and that’s why we think HMRC won’t delay.
Why is it good for businesses?
Well, we think that were it not for that enormous to-do list we all have as business owners, we’d make all the changes that we know would make running our finances easier, more efficient, more automated.
We think that MTD encourages these positive changes. We’ve long been advocates of real-time accounting but unfortunately, in many places that’s being ignored and MTD is only being painted as a negative change.
The software is ready now. It does work and in fact it provides a better way of doing things.
Xero is one of the first pieces of software to get accreditation from HMRC, meaning you’ll be able to file for MTD directly through Xero at the click of a button… hooray!
That news came 9 months before the deadline and Xero will be letting users access that feature in the next couple of months (no installs, updates or extra fees)…so plenty of time to keep testing.
So what next?
First, if you’re not on Xero, check whether your software will be ready for MTD. If it is, you might not have much to do.
If you’re using paper or spreadsheets, it’s probably time to change. Don’t panic though, it’s easier than you think! Now is definitely the time to start planning though.
If you do need to make a change or would like to find out more on MTD or Xero, get in touch below and we’d be happy to have a chat about your options.