Digital tax deadline being ignored by Scottish businesses

Fraser Campbell

MTD affects VAT registered businesses including sole traders, partnerships, companies, LLPs and charities with a taxable turnover above £85,000.

In limited cases there is a six-month extension, otherwise all affected businesses must comply from 1st April 2019, which means keeping digital books and records and filing VAT returns using MTD compatible software.

Only 13 per cent of all VAT returns are currently submitted via software, highlighting the scale of change required, irrespective of other pressures businesses are currently facing.

There will be a ‘soft landing’ for HMRC penalties during the first year, but only in respect of certain digital links for transfer or exchange of data between software programs or applications used in the MTD for VAT process. 

Businesses will be liable for fines that will vary according to the nature, and extent, of any non-compliance. MTD is being rolled out as part of the Government’s drive to digitise the tax system and reduce some of the estimated £33bn tax gap caused by issues including error, lack of care and criminality.

Campbell Dallas says it has been raising awareness around MTD for the past 2 years and has just launched a further series of seminars, drop in days and workshops across Scotland for any business requiring support to become MTD-compliant, and to understand the processes involved, and the costs of inertia.

Fraser Campbell, head of family business at Campbell Dallas, said: “MTD is being overlooked by too many businesses and it is going to become a costly oversight if there is little change to the current low rate of engagement. The media focus on the business community is understandably Brexit-centric, however, the reality is that MTD is equally pressing, if not more so. We would urge any companies that have yet to tackle MTD to do so with some urgency.”