Small Firms Tackling Cost Pressures Over Ensuring Making Tax Digital Compliance - Ts Partners

By Author: TS Partners
Total Articles: 71
Comment this article

At the time of typing, less than a month remains until the closure of the online VAT portal of His Majesty’s Revenue & Customs (HMRC) on 1st November 2022; for non-exempted VAT-registered businesses who will no longer be able to use the existing VAT online account for the filing of their quarterly or monthly VAT returns.
All VAT-registered businesses will be impacted by this, other than in cases where HMRC has granted an exemption. In the event of businesses not having achieved compliance with Making Tax Digital (MTD) by this date, such firms may risk being hit with fines from 1st January 2023.
But even with such a deadline bearing down on them, it seems that many owners of small businesses still have higher immediate priorities. As recently reported by Business Matters, two in five eligible small firms polled said that addressing ever-higher costs was a greater priority for them than compliance. An additional 28% said that tackling late payments and recruiting new personnel was more important to them.
With less than half of small-to-medium-sized business (SMB) owners also stating that they had a good ...
... understanding of MTD for their business, many firms evidently have work to do to ensure they comply with the requirements – and fast.
Signs of low understanding and compliance with MTD
While the majority of eligible businesses should have already registered for MTD at this stage, the research – which was commissioned by Intuit QuickBooks – revealed that two in five VAT-registered small businesses surveyed had not yet achieved compliance.
It seems that lack of awareness is actually the main driver of this situation, with fewer than half of respondents knowing that all VAT-registered businesses are eligible and a mere 38% being aware of the correct deadline for compliance.
There was at least some room for encouragement, with more than half of those not yet compliant stating that they were planning to take steps to address this. But on the other hand, it was also discovered through the survey that only 46% of small businesses were aware of the need for MTD-compatible software in order to ensure compliance.
There are good reasons for businesses to move fast to achieve MTD compliance, including the scope to save both time and money. Eligible businesses waiting until later will heighten the risk of them being hit with fines and penalties, in addition to driving up administrative costs.
Sure enough, two-thirds of those questioned for the research expressed the view that MTD was a cost-saving measure in the long term. Many respondents agreed that MTD would help save time and resources for companies on the basis that it is quicker and more efficient than traditional VAT returns.
Is your business well-placed to keep on top of its accounting and tax obligations?
With Making Tax Digital being just one of the many key challenges facing businesses around the South West of England and beyond over the coming months, as a business owner yourself, you will appreciate being able to tap into the best-specialised expertise.
And when it comes to all manner of aspects of tax, accounting, and QuickBooks assistance in Newton Abbot, Plymouth, or Wellington, TS Partners is one of the most trustworthy sources of such expertise.
Enquire to your nearest TS Partners office now, and we will be pleased to discuss how we could best support your business’s efforts to achieve sustainable success throughout the winter and into 2023.