'Laughable' campaign to publicise Making Tax Digital spells chaos, warns top accountant
A MAJORITY of businesses are 'blissfully unaware' a huge change in how they must file their VAT returns will soon be introduced by the government.
That is the verdict of a leading accountant who says action is needed now as the deadline on HMRC’s Making Tax Digital initiative looms.
Businesses which fail to prepare could face repercussions, as Whitehall pushes ahead with one of its biggest tax changes in a generation.
Paul Hornby (image attached) is the managing director of the award-winning JF Hornby and Co.
He said: “There’s a real issue here with the degree to which people are prepared for making Tax Digital. It’s a huge deal, and while there has been a supposed awareness campaign around what’s happening and when, my experience is that it hasn't resonated with many business owners at all.
“We have taken our own steps, as any responsible accounting firm should, to ensure that our clients are prepared and aware what’s around the corner, and I'm glad we made the decision to take that step because the efforts of HMRC have frankly been laughable.”
Almost 1.2 million businesses have one month to go before the introduction of Making Tax Digital – a new way of keeping business records and submitting digital VAT returns.
Yet only at the start of the month, only 30,000 businesses nationwide had signed up to the new service which the government says will give them a more integrated approach to business and tax.
More recent figures suggest just seven per cent of north west firms which need to sign up have done so.
For VAT periods from 1 April 2019, most businesses above the VAT threshold will need to keep their records digitally and submit their VAT return using Making Tax Digital compatible software.
HMRC has written to every business that will be mandated with information on what they should do and how.
Mel Stride, Financial Secretary to the Treasury, said: “It has never been more important for businesses to be able to seize the opportunities that digital technology offers.
“Making Tax Digital helps them to do just that – making it easier for businesses to get their tax right first time by transforming how they keep their records and send information to HMRC.
“It will give businesses more control over their finances, allowing them to spend time focusing on innovation, growth and the creation of jobs.”
Despite the government’s messages, however, Paul remains critical of the degree to which they have engaged with the business community: “The figures say it all,” he said. “With a matter of days to go until this deadline passes, tens of thousands of businesses have not taken action.
“The whole process has not been very streamlined at all - and I fear chaos looms on the horizon.”
For information on how to prepare your business for making Tax Digital, contact the team at JF Hornby on 01229 588 077.
Editor’s notes
JF Hornby and Co is based at the Daltongate Business Centre in Ulverston and employs 40 members of staff.
In 2015 and 2016 it was named UK Accountancy Firm of the Year.
The company offers a suite of services including accountancy, tax and tax planning, corporate finance, payroll solution and cloud accounting.