Home Business News Ditch paper receipts as VAT goes digital

Ditch paper receipts as VAT goes digital

by Sarah Dunsby
20th Feb 19 6:49 am

Two thirds of senior decision makers in London businesses buy food online and are big supporters of having all tax accounts digitalised, according to new figures released today.

The poll, run by YouGov for HM Revenue and Customs (HMRC), found that 66 per cent buy food online and 69 per cent support having all tax accounts digitalised.

HMRC is now inviting businesses across the capital to join its digital revolution by ditching paper receipts and signing up for Making Tax Digital instead.

Most businesses above the VAT threshold will need to keep their records digitally and submit their VAT return using compatible software when MTD is introduced for periods starting on or after 1 April 2019.

In practice, the vast majority of businesses won’t need to send their first MTD return until August at the earliest, but if they aren’t already keeping their records digitally they will need to start doing so. HMRC are encouraging more businesses to get involved early by getting software and starting to test the service now.

Mel Stride, financial cecretary to the Treasury said, “Anything that helps businesses to manage their tax more easily so they can focus on what they do best, innovating, expanding, and creating jobs and profits – is what every modern business needs.

“In a world where customers and suppliers are already banking, paying bills and shopping online, it makes sense for HMRC and businesses to bring tax affairs fully into the 21st century.

“Going digital with business records and taxes is the next step to businesses getting more control over their business and their finances.”

Theresa Middleton, director of the Making Tax Digital for business programme said, “There is no change to ‘what’ information is provided through MTD, just ‘how’ it is recorded, generated and provided. We want to help businesses be ready for the changes which kick in for VAT periods which start on or after 1 April.

“We’ll have written to every business required to join this year by the end of February, but even back in December over 80% of them were aware of the changes they need to make and the vast majority of those are already preparing.

“More than 16,500 businesses have already signed up to do their VAT digitally, why don’t you join them?”

For most businesses their accountant or other tax representative will already be aware and will advise them how and when they need to make changes to be ready for the new service.  Those already using software will simply need to ensure it is MTD compatible before joining the new service.

For those who are not using an accountant though, it is quick and easy to sign-up and there is lots of information available to help them prepare, including about what software is available.

What businesses need to do?

  • Take steps to find out if your business is affected by the Making Tax Digital changes and what you need to do if it is. Most businesses above the VAT threshold have to start keeping their records digitally and sending their VAT return to HMRC direct from their software for VAT periods starting on or after 1 April.
  • Talk to your accountant or other agent, if you use one to manage your VAT affairs about how they are making returns Making Tax Digital compliant.
  • Speak to your software provider if you already use software to ensure it will be compatible.
  • Those businesses who are either not represented by an accountant and/or do not already use software will need to select software to use and sign-up to MTD. Our GOV.UK webpages provide information on a wide variety of products, from free software for businesses with more straightforward tax affairs, to increasingly sophisticated paid solutions. There are also products that can be used in conjunction with a spreadsheet for those businesses who don’t want to change their underlying record keeping system.

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