April 2019 is the date of which Making Tax Digital for businesses registered for VAT will commence. This will mark an important milestone for how tax returns will be submitted.
What is making tax digital?
Making Tax Digital (MTD) is a UK government initiative that focuses on the ‘end of the tax return’ by creating a ‘transformed tax system’ where all tax returns will have to be filed digitally by 2020. The main goal of this initiative is to make tax administration more effective, more efficient and simpler for taxpayers.
When does making tax digital begin?
Making Tax Digital for business (MTDfb) will begin from the 1st April 2019 with MTD for VAT. From that date, any VAT-registered businesses above the threshold of £85k will have to keep digital records and submit VAT returns using a compatible software.
Keep up to date with the latest MTD news
Making sure you’re in the know when it comes to Making Tax digital will help you ensure you’re prepared for changes that you need to make. We suggest that having someone from within your business who keeps on top of MTD, will help you better understand whats going on a be prepared. Set aside time each week to keep track on MTD via our news section.
Test your data
Check to see whether your VAT-related data is accurate, up to date and that you’re using the correct VAT codes.
Start using cloud accounting software
The benefits of switching to modern cloud based accountancy software stretch far beyond just MTD. Cloud accounting enables bookkeepers and business owners to work on the same system simultaneously without needing to be in the same place at the same time.
Making Tax Digital (MTD) Software
If you sign up to the Making Tax Digital pilots you’ll need software packages that, depending on your needs, allow you to:
- Submit VAT returns
- Send Income Tax updates
The software you choose will be need to be able to keep records of income and expenses for Income Tax, or sales and purchases for VAT. If you’re already using software to keep records, you’ll need to check with your provider when the software will be updated to allow you to send updates and submit returns to HMRC throughout the year.
Make sure that the MTD software that you choose has been recognised by HMRC. Here at Blackman Terry we are a trusted partner for Xero, which is one of the first softwares to be developed ready for Making Tax Digital.
Set aside time for switching to MTD
Is your calendar for 2019 already starting to fill up? Make sure you set aside some time to make any required preparations for switching your business over to Making Tax Digital. You’ll need to consider the costs and potential disruption to your business and factor this into the time spent on preparation.
Get help with MTD
Don’t try and take it all on yourself, ensure your switch to Making Tax Digital is done properly. Get in contact with us and we can help you get your business set up.