In light of the incoming Making Tax Digital service, a poll run by YouGov for HMRC has found 68% of senior decision makers in construction have lost receipts.
It also found that 92% of senior decision makers personally bank online, almost two thirds (62%) support all tax accounts being digitalised and one in four (25%) working in small businesses are spending over 10 hours a week on administrative tasks.
HMRC is inviting businesses to reduce time spent on paperwork and join its digital revolution by testing the new Making Tax Digital (MTD) service for submitting VAT returns.
Most businesses above the VAT threshold will need to keep their records digitally and submit their VAT return using compatible software when MTD is introduced for periods starting on or after April 1st, 2019.
In practice, the vast majority of businesses won’t need to send their first MTD return until August at the earliest, but if they aren’t already keeping their records digitally, they will need to start doing so.
HMRC are encouraging businesses to get involved early by getting the right software and starting to test the service now.
Mel Stride, Financial Secretary to the Treasury, said: “Anything that helps businesses to manage their tax more easily so they can focus on what they do best – innovating, expanding, and creating jobs and profits – is what every modern business needs.
“In a world where customers and suppliers are already banking, paying bills and shopping online, it makes sense for HMRC and businesses to bring tax affairs fully into the 21st Century.
“Going digital with business records and taxes is the next step to businesses getting more control over their business and their finances.”
Theresa Middleton, Director of the Making Tax Digital for Business Programme, said: “There is no change to what information is provided through MTD, just how it is recorded, generated and provided.
“We want to help businesses be ready for the changes which kick in for VAT periods which start on or after April 1st.
“We’ll have written to every business required to join this year by the end of February, but even back in December, over 80% of them were aware of the changes they need to make.
“The vast majority of those are already preparing. More than 16,500 businesses have already signed up to do their VAT digitally – why don’t you join them?”
For most businesses, their accountant or other tax representative will already be aware and will advise them how and when they need to make changes to be ready for the new service.
Those already using software will simply need to ensure it is MTD compatible before joining the new service.
For those who are not using an accountant though, it is quick and easy to sign-up and there is lots of information available to help them prepare, including about what software is available.
Easy to use guides for businesses, agents and others, including easy-to-follow advice, are available here: https://www.gov.uk/guidance/use-software-to-submit-your-vat-returns.
Webinars and videos for MTD are also available. For more information, visit: https://www.gov.uk/government/publications/making-tax-digital-for-business-stakeholder-communications-pack/making-tax-digital-for-business-stakeholder-communications-pack#additional-support-and-guidance.