Digital tax and all that jazz – Making Tax Digital (Updated Information)
What is MTD?
You have probably heard that HMRC are Making Tax Digital, changing the way that tax is reported to make it more efficient, effective and simpler. After some delay, the next phase of MTD, VAT reporting, commenced on the 1st April 2019. The good news is that the actual information required for HMRC remains unchanged, it is the process by which it is sent that is different.
Who is affected?
As of the 1st April 2019, all business whose turnover is above the VAT threshold of £85,000 now need to start submitting their VAT returns in compliance with MTD. There are some businesses with more complex reporting requirements who are exempt to report in this way until the 1st October 2019. Please contact us if you are unsure when your business must comply.
How will this affect me?
You will be required to submit your VAT returns digitally from the first VAT quarter starting on or after April 1st 2019. This means that the first businesses will be required to report on their VAT return for the quarter ending June 2019.
There are two main requirements of MTD:
Maintain digital records – this needs to be done on wither a spreadsheet or in compatible software.
VAT returns must be submitted digitally to HMRC, businesses will no longer be permitted to submit their VAT return through their HMRC Government Gateway account. Please note that specific ‘bridging software’ must be used if businesses maintain their records on spreadsheets.
What do I need to do?
The main tasks involved in preparing your business for MTD are:
Source appropriate software/setup spreadsheets for your accounts
Work out exactly when your business must start to submit MTD VAT returns
After submitting and paying your last non-MTD VAT return, register for MTD through your HMRC Government Gateway account.
Connect your HMRC-approved accountancy software with your MTD-ready HMRC Government Gateway account.
For help and advise on choosing the correct software solution for your business or registering and submitting your MTD VAT returns, please contact Rebus Bookkeeping and Accountancy on 07720910886.