Summary
A major change to the UK's tax system starts on April 1st. Is business ready for the VAT reporting shake-up? Making Tax Digital means businesses with an annual turn-over of more than £85,000 a year must file and submit their quarterly accounts using digital software which is compliant with the new system set up by HMRC. The Government says the initiative will increase the tax take. But small businesses have expressed concerns over the costs of upgrading software and getting to grips with the new system. Joining Louise Cooper are Theresa Middleton, Director of Making Tax Digital at HMRC and Anita Montheith, Technical Manager at The Institute of Chartered Accountants in England and Wales.
Transcript
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| 0:47.6 | Welcome to the download of Moneybox Live, the programme about your money, and today is all about making tax digital for VAT. |
| 0:51.6 | Good afternoon. Making tax digital aims to revolutionise the UK's taxation system. To quote |
| 0:58.6 | the government's website, HMRC's ambition is to become one of the most digitally advanced tax |
| 1:04.4 | administrations in the world. It's supposed to help the government raise more revenue, more |
| 1:10.2 | efficiently, costing HMRC less to collect the tax owed. |
| 1:15.4 | Now, the first step is VAT. |
| 1:17.8 | Any business with a turnover of more than £85,000 a year will have to file all the required information for the sales tax online. |
| 1:25.8 | And for some firms, the deadline is in just one week on |
| 1:30.2 | the 1st of April. Now, it is a staggered process, so other firms will have until later in the |
| 1:35.2 | year to comply with the new rules. And yet out of the 1.1 million firms that pay VAT, |
| 1:42.6 | only 80,000 have signed up online so far. Well, joining me today is |
| 1:47.8 | Anita Montief, technical manager of the Institute of Chartered Accountants in England and Wales. |
| 1:53.8 | Hello, Anita. Hello. Now, what does digitalised VAT mean? Because many people file their VAT online think, well, I'm doing it already. |
| 2:03.8 | But no, this is a big change. |
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