H M Revenue & Customs are taking steps to move the UK’s tax system into the digital world, the ambition being to “become one of the most digitally advanced tax administrations in the world”.
VAT REGISTERED BUSINESS
If you are a VAT Registered business, which is over the VAT registration threshold, you will need to be keeping Digital accounting records, and filing your VAT Return via a Making Tax Digital (MTD) approved software from 1st April 2019.
Please see the following HMRC list of approved software’s; https://www.tax.service.gov.uk/making-tax-digital-software
For the vast majority of businesses, the best option will be to use a Cloud Accounting software to keep your Digital records, as not only will this ensure you will be MTD compliant but you will gain the additional benefits of Cloud Accounting.
Please see our Cloud Accounting page for further information.
Excel spreadsheets, formatted in a certain way, combined with a Bridging software, to file your return to HMRC, can be acceptable as Digital records, but in very few circumstances would it be the best option for businesses.
TURNOVER OVER £10,000
It is still the plan that businesses, including Landlords, with turnover over £10,000 will also be introduced to MTD by HMRC. In March 2019 the mandation date was pushed back to be not before 6th April 2023, which is good news for the time being.
However, with it being more than likely, the government will introduce MTD in full businesses may wish to be an early adopter and gain the benefits of Cloud Accounting.
WHAT ACTION DO I NEED TO TAKE?
Please contact us so we can advise you on how MTD may affect you and provide you with options and how you can ensure your business is MTD compliant.