Making Tax Digital For VAT
Many businesses need to prepare for the major changes that the government’s Making Tax Digital project will impose from April 2019.
What is Making Tax Digital ?
Making Tax Digital (MTD) is the HM Revenue and Customs (HMRC) strategy to modernise the current tax system. For businesses it will involve mandatory digital record keeping and quarterly reporting using MTD compliant software.
What does this mean for me?
Under the regulations, businesses with taxable turnover above the VAT threshold (currently £85,000) will be required to keep digital records and submit their VAT returns to HMRC via MTD compatible software.
A modern tax system, based on digital technology will make it easier for businesses to get their tax
right. Reducing the amount of avoidable errors will also reduce the cost, uncertainty and worry that
businesses face when HMRC is forced to intervene to put things right. – HMRC
Making Tax Digital compatible software
Modern online accounting packages such as Kashflow, QuickBooks Online, Sage Business Cloud Accounting and Xero will have software ready for MTD for VAT in time for April 2019.
What do I have to do?
Now is the opportune time to start reviewing existing bookkeeping processes and software to ensure that they will be compliant with MTD regulations.
Can I use spreadsheets?
Spreadsheets will be allowed under MTD to record your bookkeeping transactions, however there are some important restrictions. The major one is that you will need to purchase and use ‘Bridging software’ that will connect from your spreadsheet to HMRC in order to file each quarter. As there is an additional cost here, our advice is to consider moving to MTD compatible software in order to remain compliant and gain the wider benefits of being online.
Casson Beckman can help
We are able to offer expertise to avoid confusion and panic over the new process, whilst ensuring compliance