News

27 Mar 2019

Millions of businesses still not registered for Making Tax Digital

A Freedom of Information request has revealed that over a million business owners are yet to register for Making Tax Digital.

With the government’s new digital tax initiative due to be introduced on 1 April 2019, only 55,250 companies have currently registered.

The numbers, gathered by cash flow service Float, showed that 13,427 businesses have been signed-up by accounting “agents”, meaning the majority of businesses who registered for Making Tax Digital have done so independently.

If registrations continue at the current rate, around 3,000 per day, just 402,000 additional businesses will have registered by 7 August which is the date digital VAT returns are due for submission. That’s still a minority of VAT-registered businesses.

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“The Making Tax Digital deadline is fast approaching, and the vast majority of businesses are still unaware of what is required of them,” said Colin Hewitt, Float CEO and co-founder of Float.

“To fulfil MTD requirements properly, businesses need to look at registration today if they haven’t already – embracing its adoption rather than fighting it,” Mr Hewitt added.

“If you haven’t reviewed your VAT process, methods and software, you should. Will your current approach enable you to submit the required VAT information through the MTD gateway?”

Despite well-documented confusion around Making Tax Digital among small firms, Lee Murphy, the founder and CEO of bookkeeping software provider Pandle, urged business owners to ignore any scare stories.

“The vast majority of VAT-registered businesses are micro businesses with ten or fewer employees, and most of these will be scratching their heads over what the fuss is about,” Mr Murphy noted.

“A large proportion of microbusinesses use one of the various popular online cloud software providers which will automatically update to meet the change. For businesses using such cloud software, there will be no additional cost, and many businesses have already been using them for quite some time to file VAT reports rather than through the HMRC portal.”

He continued, “The group most affected will be those micro businesses who have remained wedded to using paper, Excel or outdated software, and there are quite a few of these too.

“My message to these businesses is you have nothing to fear from going digital. Such software has minimal costs, and there are even suitable free versions online. On top of this, using the simple and low-cost software designed for micro businesses will be a revelation about how things have improved in the last few years.”

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