Spotlight On: Making Tax Digital - Everything you need to know
What is Making Tax Digital (MTD)
HM Revenue and Customs (HMRC) has introduced new legislation to digitise the tax system and the way businesses maintain their records. This legislation will eventually affect income tax, corporation tax and VAT, however MTD for VAT is being introduced first.
From 1 April 2019, affected businesses will no longer be able to submit their VAT returns through the government gateway. Instead, businesses will be required to use MTD-compatible software which prepares the VAT return and sends it to HMRC digitally.
To be MTD-compatible, the software you use must integrate with HMRC’s systems. A list of HMRC recommended software packages that are MTD compliant is available here.
Will MTD for VAT apply to you?
You will need to comply with MTD if you are:
- a VAT-registered business
- have taxable supplies in excess of the VAT registration threshold (currently £85,000)
- The first VAT return to be affected will be in respect of the VAT period commencing on or after 1 April 2019.
We can help you to become MTD-compliant
If your current software supplier has no plans to upgrade software to be MTD compatible in time for 1 April 2019 or you currently maintain your records manually, please contact us and we can advise you of your available options.
If you are currently using Excel to maintain your records, we have several bridging solutions available to ensure you are MTD compliant.
Whatever your situation, we are more than happy to talk through the best options to ensure you are MTD-compliant before the deadline.
For advice on implementing digital systems or for further information on what MTD means for you, please contact Alison Horner or Androulla Soteri.