HMRC has announced that it will be pursuing a number of measures to ensure that those companies that should be using Making Tax Digital for VAT are complying with that expectation.
Research indicates close to 90% of the businesses that are expected to sign up to this have already done so, but that still leaves approximately 100,000 across the UK that are not complying. HMRC has stated that the owners of these firms have been sent at least two letters to clarify what they are required to do and that it will now take further steps to enforce compliance.
The tax authority is planning to shut down all access these firms have to pre-Making Tax Digital for VAT online systems on a trial basis. This would leave the owners of the businesses in question with no option but to use the software for Making Tax Digital to submit their VAT returns.
HMRC will be sending letters to 800 of these firms informing them that, although the existing online system will still be operational for returns due by July 7th and covering March, April and May, it will be closed to them after that.
This will leave those firms still needing to sign up to Making Tax Digital for VAT with time before the next VAT deadline, on October 7th, so they have time to familiarise themselves with it. Companies that employ accountants in Goole or wherever they live will be able to pass the responsibility on to them, but others will have to manage the change themselves.