At a small business reception at 11 Downing Street, Philip Hammond asked Gary Turner, managing director at software company Xero, about Making Tax Digital and Xero’s preparations to which Turner confirmed that Xero are ‘all sorted’ and are working with HMRC on the project.
From 1 April 2019, VAT registered businesses earning above the current VAT threshold of £85,000 are mandated to keep digital records and submit VAT returns using MTD-compatible software.
Xero is one of many software providers who are providing compatible software for businesses to use come April 2019.
Now whilst this is all well and good, as far as the Chancellor hearing what he wanted to hear, there is rather a large fly in Hammond's ointment, as espoused by Damon Anderson, director, partner and product at Xero, who told Accountancy Daily:
‘Our research has shown that 25% of small businesses currently are not even aware of Making Tax Digital and these that are only 23% realise it’s compulsory, so it is important for us to make sure that everyone is aware that it is coming up very soon.Yup, there are a lot of businesses that are not ready for MTD...is HMRC?
People have been able to file VAT in Xero for a long time, but we have taken the opportunity to upgrade the experience and have added 30 new features so Making Tax Digital for VAT is taken care of. We are not worried about our ability to prepare for Making Tax Digital we are more concerned about people realising that it is something they have to do.’
Tax does have to be taxing.
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