What The Closure Of The MTD Portal Means For Your Business
If you own or control the finances of a VAT-registered business then listen up!
HMRC recently announced that VAT-registered businesses will no longer be able to use the old VAT online portal after it closes on 1st November this year.
This means businesses won’t be able to file monthly or quarterly VAT returns through the portal and will instead need to submit them through an accountancy platform such as Xero.
The portal has been deemed a success for MTD with more than 1.8 million businesses having already filed 19 million VAT returns using the portal and there are around 2.5 million accountancy app users in the UK, so many businesses have already turned to digital solutions for filing.
For some businesses owners though, this could send the alarm bells ringing! The next step to MTD is upon us.
The thought of digitising some processes may be daunting, especially when it comes to finances. A lack of understanding might mean the whole process is overwhelming and you’ve chosen to avoid it like the plague.
However, the date for MTD for VAT was always coming and those businesses that have already digitised areas of their businesses have benefitted tremendously from a huge boost in efficiency and better organisation.
Read on to find out how these changes will impact your business (for the better!) going forward.
The move to digitisation
Since MTD was announced in 2015 the migration of businesses to these new tools for their tax filings has largely been positive.
Those that were quicker off the mark have saved countless hours of manual work and found submitting returns to be simple and made their cashflow management easier.
But for many businesses it hasn’t been plain sailing, with some still yet to move to these new digital solutions.
MTD and implementing new technologies into their businesses may sound too complex and become a burden, especially knowing a deadline was upcoming.
The fear of the unknown is natural and not knowing which digital tools to use to help with MTD is a barrier to some businesses and some are even reluctant to change the same processes they have followed for years, no matter how inefficient they are.
With the deadline fast approaching it’s critical that businesses seek guidance on how to be compliant with this new legislation.
Now it’s time to migrate to digital solutions
MTD for VAT was mandated for all VAT registered businesses from April 2022 but with the MTD portal closing next month you really need to make the move to an accountancy package that is MTD compliant if you haven’t done so already.
Failure to do this will mean penalties which are due to come into force in January 2023. Although, businesses that file annual returns can still use the portal until 15 May 2023.
The good news is there’s still time to get everything in order to avoid these penalties and above all, make filing your taxes quicker and help your business run more efficiently to save you precious time!
What are the next steps you should take?
With the deadline right around the corner it’s time to check which software is compatible for MTD and implementing it as soon as possible.
If you’re really stuck your accountant will be able to offer some expert advice and help you find the best software for your needs and help you get up and running with it seamlessly.
If you already have compatible software for MTD then you should be keeping digital records or at least beginning to so that you can get used to the system and process.
The closure of the portal is an attempt to normalise MTD and make it as HMRC describe as “business as usual”.
The way we see it is that it is a win all round for everyone. Once businesses get over the unknown and are used to using their new accountancy platforms to submit tax returns then they’ll see greater efficiencies within their businesses, be more productive and can spend more time tending to other areas of their business.
It massively improves the tax process too!
Declan is our content writer here at Know-it!
He is committed to educating readers on the importance of credit control and how technology can help streamline processes for SMEs whilst providing actionable help on how businesses can mitigate credit risk, reduce debtor days and boost their cashflow.
Connect with me on LinkedIn!