Businesses urged to register for Making Tax Digital

More than 76,000 businesses in the south east with a turnover of more than £85,000 have signed up to Making Tax Digital (MTD).

HM Revenue and Customs (HMRC) is now urging the remaining businesses which are required to sign up to do it before the VAT filing deadline next month.

Many of the 1.2million UK businesses affected by the MTD rules, which became law for VAT periods starting on or after April 1, will be required to submit their first quarterly VAT return to HMRC using software by August 7.

If paying by Direct Debit, these businesses must register by July 29.

Theresa Middleton, director of Making Tax Digital at HMRC, said: “Now is the time for businesses with an August quarterly filing deadline to sign up and join the hundreds of thousands already experiencing the benefits of MTD.

“During this first year we won’t be issuing filing or record keeping penalties to businesses doing their best to comply.”

MTD was first announced in 2015 with the aim to make it easier for businesses to get their tax right and reduce tax lost due to avoidable mistakes.

The MTD rules became law for VAT periods starting on or after April 1, 2019, and require Vat-registered businesses with taxable turnover of more than £85,000 to keep their VAT records digitally and to submit their VAT return direct from their Mtdcompatible software.

HMRC expects MTD to reduce tax lost due to errors, thanks to the improved accuracy that digital records provide and the fact that information is sent directly from software to HMRC.

The latest tax gap figures showed avoidable mistakes cost taxpayers more than £9.9billion last year – £3billion attributable to VAT alone.