Over the past few years the government has been setting out its plans to transform the tax system, known as Making Tax Digital (MTD).
The proposals introduce digital record keeping and quarterly updating to HMRC by businesses, the self-employed and landlords for Income Tax Self Assessment, VAT and Corporation Tax.
The MTD requirements will apply to VAT registered businesses (where their turnover is over the compulsory registration threshold of £85,000) from April 2019. For Income Tax Self Assessment and Corporation Tax it will not be before April 2020 at the earliest.
What does this mean for your business
MTD for VAT will mean businesses must keep their VAT records digitally and provide their return information to HMRC via MTD compatible software. The software will need to link with HMRC so that information can be exchanged both ways. Spreadsheets will be classed as digital record keeping but will not be able to link with HMRC without bridging software. It is therefore expected many small businesses will need to move their record keeping across to compatible software in time to meet the requirements.
Where can we help
At present detailed information of what will be required is limited and many software providers are still working on making their software compliant. We will be communicating with our clients via post, telephone and in person (as well as through further posts on here) to keep you updated as things progress. We are talking with our software providers about what they will be providing as well as familiarising ourselves with what we expect will be the most commonly used pieces of software.
The service we provide will vary according to each clients requirements and we will be discussing this in the coming months. In the mean time if you have any questions on MTD please feel free to contact us.