HMRC is urging businesses to sign up in time for the introduction of Making Tax Digital (MTD).
Starting on 1 April 2019, the vast majority of businesses above the VAT threshold will have to keep records digitally and submit VAT tax returns by using software compatible with MTD.
Every business has been sent this information by HMRC, with details on what is mandated, what each company needs to do, and how they can do it to be MTD-ready.
Almost 30,000 businesses have signed up for the new service, the benefits of which are a more integrated approach to business and tax.
The HMRC is now calling on the nearly 1.2 million organisations to sign up for the service that will reduce time taken on the administration of tax in the long term, and also make it easier for all companies to get their returns right.
Theresa Middleton is the Director of the MTD for Business Programme. She explained the advantages of the services.
She said: “There are over 160 software products for businesses to choose from with a range of prices, including some that are free, offering different levels of functionality to suit every business.
“It’s time to get on board and join the thousands of businesses already experiencing the benefits of MTD.”
The digital service is a key part of the government’s #Smartergov campaign, which is driving innovation through the public sector.
HMRC also recognises that some organisations will need time to familiarise themselves with the new requirements; during the first year, it has been confirmed that a “light touch” will be taken to digital record keeping and filing penalties in the cases where businesses are doing their utmost to comply with the law.
This statement has been issued with a caveat though – it does not mean a blanket ‘no penalties promise’, which means organisations must show they are trying to meet the new regulations.