Making Tax Digital
From 1 April 2019 just over 1 million businesses who are registered for VAT with taxable turnover above £85,000 will need to maintain their VAT records digitally. VAT returns will also need to be submitted directly from compatible software. If you are affected you WILL NOT be able to use the current HMRC VAT portal to input your VAT return figures. You will have to go through the new ‘digital’ gateway. Read more now to find out about how Making Tax Digital will affect you.
What does Making Tax Digital mean?
Eventually all businesses and landlords are likely to be required to keep digital records of some description and send electronic submissions to HMRC using compliant software.
VAT is the first phase of this plan.
How am I affected?
In order to comply, your VAT records need to be maintained digitally. VAT returns will have to be submitted directly to HMRC via compatible software.
You will not be able to log in to your HMRC account to submit your return.
What software is available to me?
There are a number of functional compatible software options available. We have partnered with the market leaders in this space: QuickBooks Online and Xero and would highly recommend one of these packages.
Both are fully compliant with Making Tax Digital, are easy to use and will save you valuable time.
We also support Sage which is compliant if you have an up to date version.
Who has been deferred?
Businesses with more complex filing requirements have been deferred and will have until October 2019 to ensure they are ready. This applies to the following:
- VAT groups
- Unincorporated ‘not for profit’ organisations
- Public sector entities who submit additional information with their return (e.g. NHS Trusts or Government departments)
- Public corporations
- Those traders based overseas
- Local authorities
- Those required to make payments on account
- Members of annual schemes
Am I exempt?
Exemptions may apply to some businesses based on the following:
- Remoteness of location
- Subject to insolvency proceedings
A pilot scheme was introduced in October 2018 inviting around 500,000 businesses to subscribe early, remember this is voluntary. This applies to those with up to date records and whose affairs are more straightforward. Some business have been excluded from the Pilot scheme.
Contact us today to make sure you are ready for Making Tax Digital.
4 Step Guide
Follow the link below to download our 4 step guide to Making Tax Digital