Travel companies at this year’s Aito overseas conference have been warned to comply with new government requirements to file VAT records digitally before time runs out.
From April 1 next year, as part of HMRC’s Making Tax Digital scheme, all companies with a taxable turnover of more than £85,000 will have to keep digital VAT records and submit their VAT returns online using compatible, approved software.
Jonathan Wall, managing director of travel accountancy firm Elman Wall, said the move – which coincides with Brexit – meant companies not only needed to file their VAT returns online but also had to have compliant accountancy software packages in place.
Companies with their own bespoke accountancy system, rather than an off the shelf package approved under the new regulations, may need to change or update the software they use in time for the deadline.
Chuck Richardson, managing director of technology software supplier Dolphin Dynamics, also urged more travel companies to take note.
He said: “I believe very few travel companies know about this; it’s like any new piece of legislation, it’s only now it’s getting some air time. Many travel businesses use bespoke technology they built themselves or use small providers who may not have considered this yet. There is a proportion of the market that needs to sit up and pay attention.”
Aito Agents chairman Gemma Antrobus agreed some smaller agencies may not be aware of the compulsory change.
“There will be people who don’t realise and when they come to do their tax return they will not be able to do it. They might have an accountant who comes in once a year to do their books or still do their accounting manually,” she said.
Abta has already issued guidance notes this year on the issue to warn members of the new rules and said any companies which fail to file their tax returns on time correctly could face “severe financial implications”.
More: Guest Post: VAT is going digital – are you ready? [Travolution]