For all VAT-registered businesses with a turnover above £85,000 per annum, submitting quarterly reports with more detail than that included in a VAT return is mandatory from 1 April 2019. This must be submitted via digital software, with cloud accounting software most likely to meet your needs.
You should check with your accountant when the first report will be due after that date.
How will this affect the average publican?
Hopefully, your accountant or bookkeeper is on the ball and working with you to meet your obligations.
You should however expect to make some changes to how you supply your records to your accountant, with the speed with which you pass information to them being the most important.
Most cloud accounting packages are already compliant and capable of producing the necessary returns, and indeed some desktop systems have also been upgraded to comply.
However, these are only as good as the information supplied, and it’s the quality of that information most will need to address, as well ensuring it is given it to their accountant at the earliest opportunity.
Passing a full quarters' paperwork four times a year may now present dangers not previously present, and anything that was only supplied annually may now be required quarterly.
With modern systems, documents can be safely sent electronically via file sharing software, which tends to be free to use, and requires little effort. This can be done very simply using nothing more complicated than your smart phone.
Cloud accounting packages almost all have automatic bank feeds into them, removing the need to send paper bank statements.
While Making Tax Digital is an extra obligation, and may increase your accountancy fees therefore, it’s not all bad. Cloud accounting systems give you the opportunity to obtain more timely information about your business finances and may help improve the bottom line if used properly. Your accountant should be able to train you in this.
To summarise, the issues basically come down to processes in meeting compliance requirements, and we would urge all VAT-registered businesses to interact with their accountant to ensure their processes are robust enough to meet their compliance obligations.
HMRC levy fines for failure to submit returns on time, as well as for any shortfall in tax paid. Don’t be caught out, act now.
You can find more information on Making Tax Digital here.