Making Tax Digital
The Government’s plan to make tax digital will affect every individual taxpayer and business by 2020. Making Tax Digital is designed to get all tax records online and up to date. This will allow greater accessibility to both taxpayers and HMRC. Quarterly submissions of accounts will then be made to HMRC to give a snapshot of business income and expenses.
Businesses with a turnover above the VAT threshold will be required to use making tax digital for business (MTD) system from April 2019 to meet their VAT obligations. Businesses with a turnover below the VAT threshold will not be required to use MTD from April 2019 but can choose to do so. The major legislative difference is that many individuals and businesses will have to make quarterly updates to HMRC online, rather than once a year in an annual tax return.
Platinum One Accountants can help facilitate, support, recommend and implement changes to make the transition as smooth as possible. If you are currently using a spreadsheet to maintain your records, our team has access to a cost-effective bridging software that we can set up for you, meaning there are minimal changes to how you operate.
Countdown for Making Tax Digital (MTD) for Vat
Making Tax Digital:
What is Making Tax Digital (MTD)?
Making Tax Digital is the HM Revenue and Customs (HMRC) flagship scheme that requires online tax filing and payment, as well as digital record keeping. All business taxes will be part of the scheme, but only Making Tax Digital for VAT currently has an actual roll-out date, with the rest following in 2020 at the earliest.
The primary aim of Making Tax Digital is to make tax administration more effective, efficient, and easier for taxpayers through the implementation of a fully digitalised tax system by 2020, whilst also reducing HMRC’s overheads for managing tax affairs. The changes apply to a wide range of taxpayers, including most businesses, self-employed professionals, charities and landlords. This ‘new and improved’ tax system will require the majority of business owners to maintain digital records using compatible software.
Making Tax Digital Software
Business records will need to be kept in a digital format and submitted to HMRC using MTD compliant software ever quarter. Through our partnerships with Xero, QuickBooks and Sage software we offer our clients a choice of the best, and the most cost effective solution.
Platinum One Accountants has a team of specialists who can provide expert advice and support on the best option for your business to ensure MTD compliance, as well as provide training and assistance on how to use new software and maximise the benefits it can offer.
What the future holds?
The government plans to widen the scope to include other taxes in the future however, this will not be before the system has been shown to work well, and not before April 2020 at the earliest. This will ensure that there is time to test the system fully and for digital record keeping to become more widespread.
Platinum One Accountants can you advise on the most appropriate Making Tax Digital (MTD) software for your business to ensure compliance. We also provide training to ensure that you can use the new functional MTD compatible software. For Vat registered businesses, our Accountancy Packages reduces the administrative stress of quarterly reporting.