Making Tax Digital is starting – Be Prepared
Whilst Making Tax Digital has been pushed back it is still coming and primarily it will affect VAT registered businesses only.
- Paper records will no longer be sufficient: It will become mandatory for almost all businesses and landlords (self-employed, partnerships and limited companies) to use software or a spreadsheet to keep accounting records. Paper accounting records will cease to meet the requirements of tax law.
- Quarterly reporting: There will be a requirement to submit updates to HMRC each quarter directly from accounting software, within one month of the end of each quarter.
When does it start?
VAT: As your business is registered for VAT and your turnover is above the VAT threshold you will be required to keep digital accounting records and to file your VAT returns using MTD compliant software from April 2019 (the first VAT quarter starting on or after 1 April 2019). If you currently file your VAT Return on the Revenue’s website then this method of filing will not meet the requirements.
What do I need to do now?
You need to be aware of the following in regard to your transition to MTD so that you are ready for MTD reporting for VAT by Spring 2019.
- If you currently use accounting software it may need to be upgraded. If you are considering acquiring software please discuss this with us first.
- If you currently maintain records on a spreadsheet you will need to acquire software which will allow returns and updates to be made directly from the spreadsheets, or engage us to do this work.
- If you currently maintain records on paper your processes will need to change. You will need to provide records to us promptly after each quarter-end and engage us to do the bookkeeping and quarterly reporting or acquire and use appropriate software.
Do you need any clarification or help? Please call 01303 850992 or 01233 223763