How prepared are you for Making Tax Digital?

Making Tax Digital (MTD) is a government initiative designed to transform the tax system and move it online. Paper accounting records will no longer meet the requirements of tax law.

From 1st April 2019, VAT registered businesses will have to keep their VAT records digitally and submit their VAT returns to HMRC directly from software. Further changes are expected in 2020.

Any business that has exceeded the VAT threshold of £85,000 in the 12-month period ending 31st March 2019 must join MTD from its first VAT period beginning on or after 1st April 2019.

As your accountants we will support you through the changes and provide the ongoing services that you need. The changes are so fundamental that it will be necessary to review your current record keeping systems and to reconsider what work you decide to do yourself and which activities you wish to include in the service we provide.

Who will have to switch to Making Tax Digital for Business?

VAT registered businesses with turnover above the VAT threshold will be affected from 1st April 2019. These businesses already must report and pay any VAT due quarterly, so the main change is the requirement for these records to be stored digitally and sent to HMRC using MTD compliant software. There are some exemptions.

The dates for introducing MTD for further taxes including Corporation Tax for Limited Companies, and Income Tax and National Insurance for Sole Traders have been put back to at least April 2020.

How do I prepare for Making Tax Digital?

If you are currently using MTD compliant software, you will see no change to your procedures during this period.

If we are preparing your VAT returns for you, we will continue to use our MTD compliant software and you will therefore meet the MTD requirements.

If you are currently keeping records on paper, on spreadsheets or using non-MTD compliant software, you will need to take action.

We are able to support you in the transition to MTD in a way that will suit you and your business.

If you would like to discuss Making Tax Digital in terms of your business, please contact us.

Good Accountancy

Contact us on 01420 525 020 or info@goodaccountancyservices.co.uk
for advice or to discuss how we can help.