Making Tax Digital
Many businesses need to start preparing for the major changes that the government’s Making Tax Digital project will impose from April 2019.
Preparation for these changes will take time, additional support, and for some businesses the implementation of new accounting software and processes. Therefore it is important to involve your accountants now as they can help facilitate, support, recommend and implement changes to make the transition as smooth as possible.
What is Making Tax Digital (MTD)?
Making Tax Digital (MTD) is the HM Revenue and Customs (HMRC) strategy to modernise the current tax system. For businesses it will involve mandatory digital record keeping and quarterly reporting using MTD compliant software.
All UK businesses that are VAT registered and above the £85,000 VAT threshold are now required to keep their records digitally and submit VAT returns to HMRC using MTD-compatible software. Other areas of MTD, such as Income Tax and Corporation Tax, have been put on hold until 2026 at the earliest.
It is also important to note that HMRC has confirmed that charities will not be excused from MTD for VAT.
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.
Modern online accounting packages such as Xero, Sage Business Cloud Accounting, QuickBooks Online and FreeAgent now have software ready for MTD for VAT and offer a host of other benefits to assist businesses.
HWB 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.
Advantages of using online accounting software:
- Safe and secure.
- Run your business finances anytime, from anywhere, on any device.
- Real-time collaboration with us, your advisers.
- No installation or IT maintenance required.
- Pay as you go and no up-front costs.
- Real-time view of business performance.
Now is the opportune time to start reviewing existing bookkeeping processes and software to ensure that they will be compliant with MTD regulations.
HWB can help advise you on the changes that may be necessary to you processes and systems and can advise on the most appropriate MTD software for your business to ensure compliance.
We have also produced a simple guide to activating MTD, which you can view here.