Making Tax Digital: stay in the know
Making Tax Digital is a government initiative that sets out a vision to bring the UK tax system into the 21st century and ‘make it easier for individuals and businesses to get tax right and keep on top of their affairs – meaning the end of the tax return for millions’.
Under the new regime, all VAT registered businesses (that is, businesses with a turnover of £85,000 or over on a rolling twelve month period) will need to keep their records digitally and, from 1 April 2019, submit quarterly reports to HMRC plus an annual submission at year end.
Although it seems like a daunting prospect, Making Tax Digital can have benefits for small businesses. With better financial information at your disposal, you can make better business decisions, get better advice from your accountant, and stay on top of what tax you will need to pay. If you ever need to apply for finance, well-ordered accounting records and reports will make the process easier.
Digital plans and software
Bennett Verby can look at your current systems and help you create a digital plan. You may need to invest in cloud accounting systems or buy bridging software if you want to continue to use spreadsheets. If you are already using accounting software, you might only need an upgrade to be compatible with HMRC’s MTD systems.
We can help choose the right software for you and also train your staff. If you’d prefer, our bookkeeping department can take the whole lot off your hands.
Deadlines and new rules
MTD will cover VAT returns from April 2019, which means you should get started as soon as possible. If you are on an annual VAT scheme this may already apply to you.
If your business turnover is under £85,000, you will have to start using MTD systems from April 2020. You will need to check your threshold every month from next April, however, as you will have to start using MTD software immediately if your rolling 12 month turnover figure exceeds £85,000.
April 2019 will bring shorter return deadlines too. You will have 30 days to submit a quarterly return, where the current rules give one month plus seven days.
While the Making Tax Digital deadlines have been changed substantially by the government, there is no guarantee the April 2019 deadline will be pushed back. As things stand, businesses with turnover over, or approaching, £85,000, need to be ready and prepared to make VAT returns using the MTD system in early 2019.
If you are thinking about Making Tax Digital, why not get in touch and go through your options?
You should always seek advice about your specific requirements before you act. Speak to one of our experts on 0161 476 9000 or contact us here.