Making Tax Digital (MTD) will hit VAT- registered businesses first, with VAT periods beginning after 1 st April 2019. How can you start preparing for this and can you get used to the requirements before that date?
There will be 3 major changes that will occur from April 2019.
The first one will be that keeping digital records, will become mandatory.
Secondly, data transfer between different platforms must be digital.
Thirdly, returns must be submitted via HMRC’s application programming interface (API).
Here at Central Business Services, located in Sileby near Loughborough, Leicestershire, we would never want you to feel in the dark with new regulations that are being introduced. We have a great team that will help you with any queries you may have so you have peace of mind. We do offer a wide range of services to help you with all your business needs.
In a webinar that was published on the 31st of May 2018, HMRC were keen to stress that this will not be delayed as other MTD implementation have been.
We recommend that you determine whether you will be involved in this first wave of MTD compliance as soon as possible then take steps to prepare your record keeping systems.
Mandatory reporting under MTD will affect all types of VAT- registered businesses i.e charities, partnerships, companies and sole traders. On a positive note, only businesses that have a turnover above the VAT threshold of £85,000 will have to comply from April 2019. Clients with a lower turnover who are registered voluntarily are unaffected. They can choose, if they wish, to opt into MTD, at least temporarily until it becomes compulsory.
While you may be grateful if you escape this first stage, don’t be complacent. If your business is growing you will be “in” as soon as your turnover reaches the threshold so best to make sure your systems are suitable well before you get there.
Also, the HMRC plan is to extend the range of businesses required to comply with MTD and virtually every business will be included over the next few years.
MTD is basically an extension to the existing VAT Return regime except the VAT Return must be submitted to HMRC via the API. The return is a still a nine -box return. The change is that it is populated by pulling information from the digital records. It will not be possible to just enter figures on to a VAT Return and submit this. The backup data will also be submitted so HMRC will “know”.
Digital recording of transactions is going to be the easiest and simplest way of keeping MTD compliant records. We already help our clients with access to digital software such as Quickbooks® Online, Sage Business Cloud, Xero, KashFlow – and more – included in our fixed fee. There will be a system to suit you. Ask us.
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If you have any questions regarding this article please do not hesitate to contact us on (01509) 816150 or on the contact form below one of our team will be happy to assist.