On 1 April, the way that businesses keep VAT records and submit VAT returns is changing. The government is introducing Making Tax Digital reforms as part of a long-term plan to help businesses keep on top of their tax affairs, and in principle that makes complete sense. However, the time frames that the government are insisting on are going to mean that thousands of businesses will be left out in the cold come springtime.
With the clock ticking until Making Tax Digital takes effect, most retailers aren’t aware of their responsibilities under the new rules, and only half have even had an initial conversation with their accountant or bookkeeper. The poor awareness of the changes among businesses is alarming given that there are just weeks to go, but even faced with this evidence the government has decided to press on, repeatedly ignoring calls from us, other business groups and expert advice from the House of Lords Finance Committee to delay the rollout to 2020.
Many retailers will need to navigate a vast array of potentially expensive options to choose the right one for their business over the next few weeks. The rollout of Making Tax Digital has been delayed by six months for some other businesses such as local government, public listed companies and VAT groups, so why are smaller businesses still being expected to work to the tightest time frames?
In an ironic twist, the government appears to be happy to consider delaying other major decisions that will have a profound effect on the UK because it can’t get ready in time. Surely it would make sense for the government to take give small businesses the same accommodations that it’s considering for itself and push back the introduction of these changes.
If you’re concerned about being ready for Making Tax Digital and what it means for your business, we’ve created guidance to help you prepare for the changes. All of our guidance is available online at www.acs.org.uk/advice/making-tax-digital.
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