With less than six weeks to go until the introduction of Making Tax Digital rules, only one in four convenience store retailers know what they need to do comply with the changes.
From 1st April 2019, all businesses with a taxable turnover above the VAT threshold (currently £85,000) must keep their VAT records digitally and use Making Tax Digital (MTD) compatible software to submit their VAT returns.
ACS surveyed over 1,200 retailers in late January/early February to find out how prepared they are for the changes. Despite 50% of respondents having had a conversation with their accountant/bookkeeper about MTD, only one in four (26%) are aware of their responsibilities under the new rules and just 6% of those surveyed have the appropriate software to comply with the changes.
In October 2018, ACS submitted evidence to a House of Lords Committee expressing concerns about the impact of MTD on retailers, including scepticism about the Government’s estimate of costs of the changes. The Committee, along with ACS and other business groups, recommended that MTD changes be delayed, but the Government has still decided to go forward with the April 1st 2019 implementation date.
ACS chief executive James Lowman said: “The Government is pressing ahead with the introduction of Making Tax Digital reforms despite calls from ACS and a breadth of business organisations to delay the changes until 2020. There are thousands of retailers who still don’t know what the changes mean for their business, suggesting that there will be significant disruption in April. Once again, we urge the Government to delay these changes and give retailers more time to prepare, especially in the context of continued uncertainty around Brexit.”
ACS has produced guidance for retailers to help them prepare for the Making Tax Digital changes, which is available here: https://cdn.acs.org.uk/public/lobbying/acs_submission-hmrc_powers_and_making_tax_digital.pdf
