HMRC has revealed that more than 230,000 VAT-registered businesses signed up for Making Tax Digital (MTD) before the second stagger deadline last month. This means that 95% of all mandated firms are now signed up to the scheme.
While this figure is impressive, there are still 80,000 companies who are yet to register for MTD. HMRC has said that they will be writing to these businesses to remind them of their obligations.
The Revenue’s reminder letters have proved successful when it comes to increasing the number of stagger-one businesses signing up to MTD for VAT. Around 120,000 missed the stagger-one deadline on 7 August 2019, but 5% of those have since joined the scheme.
Deputy chief executive at HMRC, Jim Harra, commented:
“Our ambition is to help businesses moving to MTD to get it right, not to penalise them. HMRC’s decision not to enforce penalties will help businesses transition to MTD without fear of getting it wrong.”
More than 80% of the total mandated population is signed up to MTD and are actively using the service. HMRC estimates that around 60% of stagger-three businesses will have signed up for the following deadline on 7 October 2019.
What if I don’t register?
Making Tax Digital became a legal requirement for VAT-registered businesses in the UK in April 2019. The scheme is applicable to those earning more than £85,000 and means that from now on, firms need to keep their records digitally and submit their VAT return using MTD-compatible software.
The scheme is designed to make the tax process easier as well as ensure firms get their figures right the first time round.
Although the Inland Revenue is adopting a light-touch approach for now, they will start getting a lot stricter about the issue from 1 April 2020. If you’re one of the 80,000 businesses who are yet to register for MTD, it’s advised that you do so before HMRC starts imposing penalties.
To read news and blogs from Lisa Smith, click here >>