Over two thirds of businesses in Wales (67%), say that Making Tax Digital is a good idea but that they need more support with their plans ahead of the deadline of April 1st 2019 for VAT, according to new research from KPMG.
From 1st April 2019, most VAT-registered businesses above the threshold of £85k will have to keep digital records and submit VAT returns using compatible software (a small percentage of businesses with more complex needs are deferred to October 1st 2019). After a soft-landing period of a year, a further requirement for digital links throughout the VAT return process, or a digital audit trail, will be required until the deadline of 31 March 2020.
- Over two thirds (67%) said that it was a good idea but that they needed more support
- Only 16% said that it offered their business no benefit
- Just 13% said that they were supportive and ready for the deadline
- 4% said that it would be damaging for their business
Simon Jones, Senior Partner at KPMG Cardiff, said:
“With just over a month to go until the deadline, it’s worrying to see that over two thirds of businesses in Wales say that they need more support and are still in the process of working out what they need to do. This could potentially be both costly and time-consuming, depending on the changes that need to be made.
“Although 98% of VAT registered businesses already file VAT returns electronically, Making Tax Digital (MTD) will involve significant changes to their existing processes. For example, keeping digital records, maintaining a digital audit trail of all business transactions, and implementing new software to submit their VAT returns digitally.
“Once businesses have made those changes, then they also need to think about the flexibility of their systems and processes to meet potential future requirements under MTD. HMRC are seeking to become the most digitally advanced tax administration in the world. We are likely to see provisions for income tax and corporation tax further down the line.”