A survey carried out by HMRC has revealed that 81% of VAT-mandated businesses are ‘aware of Making Tax Digital for VAT (MTD for VAT)’, either by name or by concept.
MTD for VAT is set to come into effect from 1 April 2019 for businesses which have a taxable turnover above the VAT registration threshold (currently £85,000). As part of the initiative, businesses must keep some records digitally, and must submit their VAT returns via an Application Programming Interface (API).
HMRC polled 500 businesses, and found that 43% of firms had heard about MTD through their accountant. A further 13% had heard about the initiative via an email from HMRC; 11% read about it on HMRC’s website; and 9% heard via a letter sent to them by HMRC.
However, only 45% of businesses stated that they plan to sign up to MTD for VAT before its introduction in April. One in five firms ‘don’t have a clear idea’ of when they plan to sign up, and 4% said that they require additional information before they decide.
Commenting on the MTD for VAT initiative, Mel Stride, Financial Secretary to the Treasury, said: ‘HMRC has made good progress in preparing for MTD. The pilots have progressed well, and the full functionality of MTD has been tested with a wide range of different businesses, including some below the VAT threshold, which have chosen to take part voluntarily.
‘HMRC is ready, the software market is ready, and hundreds more businesses are getting ready every day by joining the pilot.’