Half of small businesses say they have made mistakes when sending in their VAT return and only a quarter are confident they have the figures correct despite spending more than an hour checking
With the first deadline for online filing under Making Tax Digital for VAT falling this month, software specialist Intuit QuickBooks surveyed 500 UK small business owners in July and found they spend an average of 86 minutes checking their figures before sending their VAT return to HMRC.
Yet 51% have made mistakes when completing their VAT return and only a quarter (27%) say they feel confident they have filed their return correctly.
Of those who made errors with their VAT return, 27% overpaid and got money back from HMRC, compared to 18% of small businesses who received fines because of their mistakes, suggesting such errors can impact cashflow.
The research also indicated that after filing their return, a third (35%) of small business owners feel relief that it is out of the way, but 19% still worry they have missed something and 18% are anxious they have made a mistake.
Under Making Tax Digital, all businesses that are VAT registered and have a turnover of £85,000 or above had to register for online filing by April, with the first online returns for those that file quarterly due on 7 August.
QuickBooks has developed SmartScan, a free add-on tool within its software suite that checks for the most common errors in VAT returns before they are submitted, including identifying duplicate expenses and invoices, inconsistent VAT tax codes, and cross checking highest value transactions. Chris Evans, VP and country manager at Intuit QuickBooks UK said: ‘There is a big move towards digital in the UK, in part driven by the new MTD legislation, but also due to the increased advantages technology can offer a business.
‘SmartScan is a great example of how digital innovation can not only save time, but also save the stress and worry around filing VAT returns, especially for those that are anxious about filing their first MTD submission this month.’
Pat Sweet | 06-08-2019