Making Tax Digital
What is Making Tax Digital?
Making Tax Digital (MTD) is intended to bring the UK tax system into the 21st century by providing individuals and businesses with a modern, streamlined system to keep their tax records and provide information to HM Revenue & Customs (HMRC).
Individuals and businesses are all starting to see the benefits of digitisation. Millions are already banking, paying bills and interacting with customers and suppliers online, this is the direction that the world is moving in and for many this is how we expect to work and interact. HMRC need to keep up with this transformation, so that everyone can start to enjoy the benefits that come with it. The actual change required to comply with MTD is that individuals and businesses must maintain digital records and they must submit data to HMRC using MTD compatible software.
When will MTD affect me?
The first to be affected will be VAT registered individuals and businesses with taxable turnover above the current VAT threshold of £85,000. This group will be required to keep digital records from 1 April 2019. Eventually, MTD for VAT may be extended to all VAT registered businesses, but this will not happen before April 2020 at the earliest.
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What do I need to do?
The first step you need to take is to review your current software solution. If you are not currently using bookkeeping software, you need to investigate what options are available to you and which is the best solution for you, ensuring that it is MTD compliant. If you have a VAT scheme or set of VAT calculations that are not handled by bookkeeping software and you need to continue to use spreadsheets you need to look at the bridging software that is available.
Help with Making Tax Digital
As small business owners ourselves, we fully understand what is required to manage your business records digitally. At Basra & Basra, we've spent a great deal of time training and developing the right support services to help small businesses through this period of change.
HMRC will not be offering software to help you report quarterly, so we will advise you about MTD compliant software such as QuickBooks to help make managing your accounting records easy, wherever you are.
If you would like us to help you through these changes then call us on 0238 0211 1111 or contact us online to arrange a free initial consultation.
Please note that the information provided above is based on current guidance from HMRC and may be subject to change.