Making Tax Digital (MTD)

Are you ready?


What is Making Tax Digital?

Making Tax Digital for Business (MTDfB) is the most fundamental change to the administration of the tax system for over 20 years. MTDfB is a key part of the government's plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs as well as transforming HM Revenue & Customs (HMRC) so that it is more efficient and effective.

Paper records will no longer be sufficient. Almost all businesses will be legally required to use digital software, or spreadsheets with approved bridging software, to keep accounting records. They will be required to submit quarterly returns to HMRC directly from the software within one month of the end of each quarter.

What's the rush?

HMRC is rolling out MTBfB in phases which started with Making Tax Digital for VAT in April 2019.

For VAT registered businesses with a turnover over £85,000 from the 1st April 2019 you must

  • keep accounting records in a digital form, and

  • file VAT returns via MTD-enabled software.

Submitting your VAT returns through Government Gateway is no longer an option with the penalties for late filing and non-compliance being severe, with a penalty points system coming into play.

If you are VAT registered and your turnover is below £85,000, under the new regulations you need to monitor your taxable turnover and if you exceed the annual threshold you will need to comply with MTD from the beginning of your next VAT quarter. This means if you are close to the threshold you need a plan in place to ensure you can meet your obligations in time should you become mandated to do so.

Don't panic! But you do need to take action

This change might seem daunting but there is no need to panic. We have compiled everything you need to know so your transition into digital tax recording can be as smooth as possible.

We can give advice and support to help with the transition to ensure you are compliant. We can provide the software, the training and assist with implementation of new systems to get you ready for MTD. 

Please contact Alison Grocott on 01270 624445 or email us by clicking HERE.

Click HERE for details of our cloud accounting solutions, the benefits go way beyond your VAT return.

What does this mean for my business?

    We recommend to begin preparations as soon as possible, to ensure a smooth transition to the new digital accounting recording requirements.

    • If you are currently using accounting software, you will need to upgrade or consider new MTD-compatible software.
    • If you are currently keeping your records on a spreadsheet, you will need to obtain approved bridging software that will allow returns to be made directly from the spreadsheets or explore and consider a move to a suitable and compliant digital accounting solution.
    • If you are currently keeping paper records, you will need to acquire and implement the use of appropriate software.
    • If you are below but close to the threshold you will need to consider your plan to monitor turnover to ensure you are prepared and able to meet your obligations when mandated to do so.
    • If you think any of the exemptions from MTD apply to your business you will need to contact HMRC to discuss alternative arrangements.
    MTD Timetable

    The deadline of April 2019 was one phase in the timetable recently announced by the government.

    HMRC provide MTD related support for businesses on their website, please click HERE to visit HMRC's site and find out how VAT businesses can get ready now.

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