Tax Blog: Making Tax Digital
Making Tax Digital (MTD) came into force on 1st April 2019.
What is it?
MTD is an HM Revenue and Customs initiative designed to ensure that the UK tax system is effective, efficient and easier for taxpayers.
MTD for VAT is new legislation that requires all VAT registered businesses with a taxable turnover, above the £85k threshold, to keep their records digitally and submit their VAT Returns using MTD compatible software. Businesses affected by MTD for VAT will no longer be able to use HM Revenue and Customs Online Services.
VAT registered businesses below the threshold can join voluntarily.
How does it affect my business?
The good news is that most of our clients at MATCH Accounting use cloud based software (Xero) which is MTD compliant. There will be small changes and an authority process which we can handle, but largely nothing has changed.
For clients who do not use Xero (or any other compliant software), we will be happy to discuss the options available to them which includes the use of ‘bridging software’ to allow the information to be filed.
MTD is not as complicated or scary as you may think as it is just basically a change in the way information is sent to HM Revenue and Customs. Indeed, it is the same 9 box information being submitted as before, just in a different format.
For those already using cloud accounting, there are no fundamental changes as to how they already operate. For businesses who are not using accounting software to record and file VAT Returns, perhaps is now the time, and opportunity, to unleash the power of cloud accounting.
Please do not hesitate to contact MATCH Accounting if you have any questions regarding MTD.