Making Tax Digital – What do the changes mean for you?
We’re all aware that tax is going digital from the 1st of April 2019. If you submit quarterly returns, you are already making sales which will fall past this date. The government recently published figures showing just 4% of companies have accepted to be a part of their pilot scheme. With that in mind, we felt a quick summary might be necessary.
KPMG have found that two thirds of companies feel they require more support ahead of the deadline. However, many companies do agree that the change is necessary. What do the changes mean for you and the way you organise your tax?
- VAT-registered businesses with a taxable turnover over the VAT threshold of £85,000 will be required to keep and maintain digital records and submit VAT returns to HMRC via compatible software.
- Digital records are required . You will no longer be able to manually input your VAT totals to HMRC’s website to submit your return. This has to be automated through a compatible accounting software or piece of bridging software.
- So, whilst you might already keep digital records, on Excel perhaps, from April they must be kept in such a way that adheres to the Making Tax Digital regulations and compatible with HMRC’s digital platform.
- Records need to be preserved for six years.
HMRC will not be fining non-compliant businesses within the first year of the new MTD regulations. However, these changes are just the start, so it pays to get used to them now.