Making Tax Digital
1st July 2018
Changes to the UK tax system mean that from April 2019 the way businesses report their tax affairs to HM Revenue & Customs will change.
From April 2019 all businesses with a turnover above the VAT threshold (currently £85,000) will have to keep their records digitally and provide the
The regulations state that if a business is in the scope for making tax digital then it must use compatible software to meet the following requirements;
Keeping records in a digital form as required by the regulations
- Preserving digital records in a digital form as required by the regulations
- Creating a VAT return from the digital records held in functional compatible software and providing HMRC with this information digitally
- Providing HMRC with VAT data on a voluntary basis
- Receiving information from HMRC on a digital basis
This will mean changes to the way many businesses keep their records. No longer will paper based cash books and spread sheets comply with HMRC legislation. These business owners will need to move to keeping their business records and submitting their returns to HMRC through compatible software.
In order to be ready for the changes, it is advisable to start making the changes without delay. This will ensure that any teething problems are eliminated before going live in April 2019.
Fortunately, the accounting software market has been working alongside HMRC to provide the right software.
Providers such as Sage, Xero and Quickbooks are market leaders in this area and their software complies with the requirements. The software comes at a cost to the user but as well as ensuring compliance with HMRC requirements, the changes will encourage businesses to keep better records with more timely information for the business owners.
This is only the first phase of making tax digital (MTD) and in the future we will also see income tax and corporation tax being brought into the same system, ultimately completing a fully digital system which allows electronic communication between HMRC and the taxpayer.
As a partner with Quickbooks and Xero, Botterill & Co can provide software licences at a discounted price and provide the training to make sure businesses are compliant prior to April 2019.
If you would like to discuss this in more detail, then please contact Gareth Botterill on 01482 862240 or email firstname.lastname@example.org<< Back to Blog