The warning comes from a joint digitalisation strategy working group that consists of members from the Association of Taxation Technicians (ATT) and the Chartered Institute of Taxation (CIOT).
From 1 April 2019, VAT-registered businesses with turnover of more than £85,000 will be required to maintain digital accounting records and file VAT returns through MTD-compliant software.
HMRC has promised a “light-touch” approach towards digital record-keeping and filing penalties where it perceives businesses are doing their best to comply with the law.
But the group warns that this approach does not extend to the late payment of VAT, and raised concerns about those who may pay their returns by direct debit.
This is because the VAT returns act as the trigger for payment to be taken from their bank account, and if someone files their VAT return late, their VAT payment will also be late as a result.
Adrian Rudd, chairman of the joint ATT/CIOT digitalisation and agent strategy working group, said:
“There are about 2.2 million VAT-registered businesses in the UK, but only around 12% of VAT returns have been submitted through software, in other words how they will be required to be submitted under Making Tax Digital.”
“We urge businesses not to panic, but to seek professional advice.”
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