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Business Group Calls on Government to Delay Making Tax Digital Plans

Business Group Calls on Government to Delay Making Tax Digital Plans

An influential business lobbying organisation has called on the government to push back plans to introduce new rules insisting that companies complete their VAT returns via digital platforms.

Legislation already in place means that all VAT registered companies with taxable turnover in excess of £85,000 per annum should start filing their returns digitally from April 1st 2019.

That leaves little time to adjust to the new rules for any company which is yet to familiarise itself with the requirements entailed by the incoming regime referred to officially as being the government’s ‘Making Tax Digital’ initiative.

According to the British Chambers of Commerce (BCC), there is a widespread lack of preparedness among UK companies when it comes to the issue of VAT digitisation.

In fact, research carried out recently by the BCC suggests that as many as 19 per cent of companies that will fall under the remit of the incoming tax laws have either never heard of Making Tax Digital or they only know it by name.

Small businesses in particular are understood to be struggling to get to grips with the requirements being asked of them by the new rules, with some suggesting that HMRC has not been clear enough in its guidance on the subject.

More than a third of the companies polled by BCC on the subject said that they’d upgraded or otherwise sourced new accounting software specifically to prepare for the new laws on digitisation.

For some businesses, the need to upgrade their software represented an additional cost that comes at a bad time in light of the ongoing uncertainty they’re facing as a consequence of Brexit, the BCC has said.

The relative lack of awareness around the subject and “poor communication” between HMRC and businesses means the government should “urgently delay” the introduction of its Making Tax Digital plans, according to the BCC.

“The idea to modernise the UK’s tax system is a good one, but the timing couldn’t be much worse,” says Suren Thiru, the BCC’s head of economics.

“In the current environment, the introduction of Making Tax Digital is an added cost and administrative burden and there still isn’t adequate understanding or preparation among businesses to make its rollout a success right now.”

David Tattersall
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