Only 55% UK legal firms will be prepared for Making Tax Digital regulation – Advanced survey reveals
HMRC wants to make it easier for getting VAT returns right first time, minimising costly mistakes, but latest Trends Report shows firms not ready
Just 55% of law firms in the UK say they will be ready for Making Tax Digital which comes into force from 1st April, according to Advanced’s latest Trends Survey Report1. Worryingly, 43%, admit they don’t know.
The regulation, which applies to all VAT-registered businesses with a taxable turnover above the VAT threshold, is a key part of the government’s ambition to become one of the most digitally advanced tax administrations in the world. It will make it easier for individuals and businesses to get their tax right first time, helping them minimise costly errors.
According to HMRC’s latest tax gap figures, many of its customers struggle to get their tax right – with avoidable mistakes costing the Exchequer over £9 billion a year. The improved accuracy that digital records provide will help reduce the amount of tax lost to these errors, but the question is: why are some organisations slow to embrace Making Tax Digital?
Doug Hargrove, Managing Director – Legal – Advanced, comments: “The government is right to implement initiatives that mean organisations need to become more digital but our research suggests that not enough support is being given to help them prepare. However, this responsibility doesn’t fall to the government alone. Suppliers approved by HMRC to support Making Tax Digital need to offer ongoing support too, as well as provide software that is accessible and user-friendly – otherwise businesses will continue to hold back or make errors.”
To help firms get ready for Making Tax Digital, and understand more about the mandatory regulation, Advanced is running a free webinar on 13th February at 9am GMT.
Wherever they are in their journey to Making Tax Digital, representatives from VAT-registered organisations are invited to listen and speak to Advanced experts on how they can ensure their submissions are digital come 1st April. They will also be able to see how Advanced’s new Cloud software, Business Tax Portal, can help.
The Business Tax Portal from Advanced, which has become an essential finance tool among other UK organisations, brings benefits in five key areas:
- Accuracy – reducing opportunities for error or miscalculations
- Productivity – automation removes laborious manual entry of VAT forms
- Collaboration – access to VAT information in a central repository
- Efficiency – faster, simpler process to record and file tax returns
- Transparency – with the opportunity for monthly tax updates
Doug concludes: “The beauty of our solution is that it complies with HMRC’s systems to keep and maintain digital records according to the Making Tax Digital regulations. It looks the part, and it plays the part. Users can digitally send VAT returns containing data held within the software, provide VAT data to HMRC, and access information sent by HMRC in one place.”