It has just got harder for small business owners with the changes to VAT returns and payments procedure commencing from April 2019.
In a “nutshell”, all businesses will have to keep an electronic record of all business transactions on approved record-keeping software to make VAT returns.( In a recent Financial Times article, 400,000 businesses are NOT aware of these changes according to a recent Parliamentary report.) A recent Financial Times article stated that, according to an earlier Parliamentary report, 400,000 businesses are NOT aware of these changes.
This will require investment in new accountancy software, training to use it and a good working internet connection. This could be the first step towards longer-term plan to make all tax submissions electronic. So much so it has been suggested that income and expenditure records will have to be submitted electronically by April 2020.
HMRC officials say this is part of a strategy that will help them narrow the deficit gap by reducing record-keeping errors as well as reducing tax evasion. According to figures from HMRC there is a shortfall of £12.6bn.
Richard Dilley – Partner at George Hay Chartered Accountant of Letchworth, commented “Making Tax Digital is a Government project and undoubtedly there will be additional costs for businesses. However, moving to a digital platform may mean more up to date management information for business owners to help them to focus on their businesses on a more regular basis”.
I agree with Richard’s comments and it advisable to contact your accountant as soon as possible to make sure you comply with the HMRC requirements.
Nigel Taylor Cert PFS, Dip FA
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