Making Tax Digital – what do you need to do and how can we help?
The most pressing date for Making Tax Digital is the VAT implementation date -which for most companies is the first VAT return commencing after March 31st 2019.
HMRC believe that the new system will be more effective, more efficient and easier for taxpayers to get their tax right; it is a key part of the government’s plans to make it easier for individuals and businesses to submit correct returns.
HMRC state that a major step forward in this ambition with the introduction of Making Tax Digital (MTD) for VAT as the first stage.
Who will be affected?
If you are above the VAT threshold and are a business then you are required to keep digital tax records as of April 1st 2019. You will need to file your VAT returns to HMRC via MTD enabled software. We can advise you whether you will need to comply, please do contact us.
You will need to keep your tax records in a digital format either in accounting software or on spreadsheets – both are acceptable. If you use accounting software – it must be MTD compatible. If you are using spreadsheets, the data will need to be uploaded into appropriate software. It may sound complex, but with our help the process is simple and efficient – and will save you time and avoid errors.
If you currently keep your business records manually then we can offer you the options of moving to accounting software, Excel training or if you prefer it we can provide a bookkeeping service and make the quarterly returns to HMRC for you.
There are some exemptions to the requirement to comply with MTD, these include religious grounds or disability. Each case is individual and it is perhaps best to have a detailed no obligation discussion with one of our advisors.
Income tax for Businesses
The good news here is that taxes other than VAT will not be covered by MTD until April 2021 at the earliest. However, HMRC is running a live pilot test with some businesses and agents. to develop the Making Tax Digital service for Income Tax.
Income Tax and MTD for individuals.
Every Individual now has a Personal Tax Account which can be accessed online at https://www.gov.uk/personal-tax-account.
If you have not already visited your own account, then we would strongly advise you to do so. You will find an outline of your tax position. It is sensible to check the information held here to ensure that your tax summary is correct. We would be delighted to help you ensure that you are not overpaying or underpaying tax.