Accounts deadline and Making Tax Digital
A raft of measures have been proposed by the Department of Business, Energy and Industrial Strategy (BEIS) to improve the way that financial information is filed at Companies House in the future. One of the key suggestions is to shorten the time limits for filing annual accounts at Companies House from nine-month to six months for private companies.
The consultation has been completed and the responses are currently being analysed by BEIS and we await the outcome. However, we don’t expect this drive for more timely and relevant financial information to diminish. We also have HMRC pressing forward with Making Tax Digital (MTD) for corporation tax from April 2026. This is all traveling in one direction to ensure companies have accurate and up-to-date financial information at the push of a button.
While MTD for Corporation Tax is a few years away, the MTD journey is already in full swing. Currently, VAT registered businesses with taxable turnover above £85,000 need to comply with MTD for VAT and this will be extended to all VAT registered businesses, regardless of size, from April 2022. MTD for VAT requires digital record keeping, digital links of VAT records, and ultimately digital submission of the VAT return to HMRC. Therefore, VAT registered businesses will likely be more ready for MTD for Corporation Tax as they will already be maintaining digital records for VAT purposes.
Embracing online accounting not only enables MTD compliance but opens the door to a wealth of commercial benefits. There are a lot of powerful platforms out there that enhance reporting and utilise data analytics to give meaningful insights into market and business trends. This enables interrogation of historical data to make automated future predictions and create more accurate budgets and forecasts instantly. Scenario planning that used to take finance teams weeks to prepare, can be seamlessly integrated into current forecasts in a matter of hours.
With the time limits for submitting annual accounts potentially reducing and MTD expanding to other taxes, many businesses will need to review their current record-keeping and ensure that it is fit for purpose, maximising the use of the accounting technology available to make the process efficient and painless.
At Kreston Reeves we are here to support our clients in this journey and we are confident that the shortening of the deadline for submitting accounts to six months is achievable for all our clients.
Watch our Shaping your future report launch webinar, where Emily Baldwin discusses the financial digital revolution.
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