HM Revenue and Customs (HMRC) introduced the new Making Tax Digital (MTD) programme in April 2019.
Since then, most self-employed people and business owners with a turnover above the £85,000 VAT threshold have been forced to file their returns online using specialised software.
The move was widely criticised, given small businesses would have to spend hundreds of pounds on new software and staff training to comply.
The taxman had previously stated that it would not issue any fines to businesses filing late in the 2019-20 tax year, unless that is, firms were found to be deliberately avoiding the new rules.
However, HMRC has quietly introduced a new concession that will give some businesses more time before they have to file their first return. Those with complex or legacy IT systems now have until April or October 2020, depending on their filing deadline, to make their first submission.
Experts at Whitley Stimpson, one of the largest independent accountancy practices in the area, are keen to advise on best practise around MTD, and want to ensure that businesses are aware of the rules, subsequent concessions, and how their business may be affected.
HMRC announced that the latest move comes after it consulted industry experts and trade bodies, both of who expressed concern that firms would not be able to comply during the current tax year – even with the one-year soft-landing period to put digital links in place already established.
However, business owners must demonstrate to the taxman why they are unable to make the correct submission and set out how they plan to implement new software.
John Skinner, senior manager at Whitley Stimpson says:
“Through ongoing engagement with businesses and stakeholders, HMRC identified that a small number of businesses using particularly complex IT systems would face difficulties with the 2020 deadline putting those digital links in place. Therefore, they have introduced a process to apply for additional time so that businesses are not penalised while making their best efforts to comply with all other MTD requirements. Businesses should review HMRC guidance and criteria for issuing a digital link extension carefully before applying.”
“If businesses remain unsure about their options or obligations with regards to MTD”, continues John, “Whitley Stimpson has a team of experienced and highly qualified specialists with offices in Banbury, Bicester, High Wycombe and Witney, who can advise on all MTD matters.”
For further information visit https://bit.ly/2VsPX7E or contact John Skinner on 01295 270200 or johns@whitleystimpson.co.uk.