Making Tax Digital for businesses
Are you ready?
Rayner Essex Partner Neil Heyes asks is your business ready for MTDfb? It is now less than one year away. Did you know that from April 2019 ALL VAT registered businesses with turnover above the VAT threshold will be required to maintain digital records and will need to send their VAT information to HMRC using third party commercial software?
This system is different to the HMRC portal that you are currently using to file your VAT returns online and will provide a direct digital link from your accounting records to your VAT return which will be filed with HMRC.
If you currently compile your VAT return either partially or completely using spreadsheets, then this will still be permitted but there will have to be a digital link between the spreadsheet and your VAT return to ensure a seamless flow of data from the business to HMRC.
All transactions will have to be stored digitally but documents can continue to be stored in paper form.
What should I do now?
MTD will require you to use third party software to complete your tax returns. HMRC are running a small pilot, in which we will be taking part, but the full system requirements have not been published. HMRC are in discussions with all the major accounting software providers to enable them to adapt their software which will provide the link to enable VAT returns to be filed. The number of compliant software packages is increasing on an almost weekly basis and we will endeavour to keep you informed via regular updates. We will provide more information after the HMRC pilot has been completed.
Rayner Essex will be co-hosting a number of seminars in October along with accounting software providers Xero, Quickbooks and Sage so please look out for details once we have released them. We will also be hosting drop-in surgeries for any queries regarding the online software that will assist you with the transition to Making Tax Digital through September and October. You can find the dates for the surgeries here.
Rayner Essex has also invested in an excellent App to make the transition to MTD even easier. You can use our app to keep track of your invoices and any expenses digitally and can find out how to download it here.
What about income tax and corporation tax?
This will not change before 1 April 2020 at the earliest. When this is implemented businesses and landlords will have to submit quarterly accounting information to HMRC.
If you have any questions about MTDfb VAT returns please call Rayner Essex on 01727 833222 or email firstname.lastname@example.org. We have a specialist MTD team who will be issuing information as it becomes available from HMRC.