10% of UK Businesses Miss First MTD Deadline
Despite daily updates from HMRC, a year and a half ‘phase-in’ period and a significant number of TV adverts promoting Making Tax Digital (MTD) compliant software, one in ten business have missed the MTD deadline and therefore filed non-compliantly.
The latest figures released by HMRC show a 90% national compliance rate. With 1.2 million businesses being required to sign up to MTD for VAT before August 7th, only 1.08 million have successfully done so. Businesses are required to file via MTD compliant software where sales have surpassed the VAT registration threshold of £85,000 in revenue.
Considering over 100,000 businesses missed the deadline, HMRC is adopting a more lenient approach than usual with regards to penalties during the first year of MTD.
A statement directly from HMRC explained: ‘We has acknowledged that businesses will need time to become familiar with the new requirements of MTD. During the first year of implementation, we will not issue filing or record keeping penalties where businesses are doing their best to comply. However, sanctions will remain possible in cases of deliberate non-compliance in order to safeguard VAT revenue’.
Gareth Kobrin, CEO of VATGlobal, states: ‘with such a significant change to the way VAT filing occurs in the UK we expected a small collection of businesses to miss the deadline, however, the figure being as high as 10% is concerning. Perhaps the ever-changing threat of a no-deal Brexit has diverted people’s attention from this, either way, HMRC will not keep waiving non-compliance fines forever. We’ve seen a huge uptake in our MTD compliant software ‘VSuite’ in the past month and implore anyone still not MTD ready to contact us’.