Making Tax Digital Update

by Acuaccounts | Aug 21, 2018 | accounting, tax

The Making Tax Digital (MTD) for VAT deadline is drawing closer. It’s less than a year until UK businesses that are VAT registered and above the threshold will be required to keep their records digitally, and submit VAT returns to HMRC using MTD-compatible software.

Even so, there’s still plenty of confusion in the market around which online accounting software will be compliant with MTD for business’. And what it’ll mean for businesses and accountants. So we’re here to answer some of those frequently asked questions and make sure you’re kept fully up to speed with what is changing.

Difference between filing VAT returns now & the MTD method?

MTD VAT will be a different experience to the current VAT experience being submitted today. The VAT return is the same, but e.g HMRC will provide the returns to software, rather than people choosing dates for a return themselves. We will also make sure you’ll be able to make any required adjustments to the return before submitting to HMRC. There are other changes and differences too, so we’ll make sure you’re fully up to speed as soon as we are clear on the process from HMRC.

What else should you be aware of?

MTD for VAT is due to commence for VAT periods starting on or after 1 April 2019. So all businesses will need to comply with the new process from this date onwards. This means that many businesses will need to make a decision about their accounting software soon to avoid facing the complication of changing part way through their accounting year.

For example, a business with a 30 June 2018 year-end will need to use MTD-compatible software from 1 July 2018 to allow for the MTD requirements that will be required from April 2019.

Making Tax Digital

by Acuaccounts | Aug 21, 2018 | accounting, tax

Making Tax Digital (MTD) will fundamentally change the administration of the UK tax system. On 13 July 2017 the government announced a new timetable and changes to the implementation, which mean that MTD will not take effect until April 2019 and will only be mandatory at that time for businesses over the VAT threshold.

Making Tax Digital is a government initiative that sets out a bold vision for a digital tax system to ‘make it easier for individuals and businesses to get tax right and keep on top of their affairs – meaning the end of the tax return for millions’. The aim of the initiative is to make tax administration more effective, more efficient and easier for taxpayers, through the implementation of a fully digital tax system.

What’s changing?

The current plans, in brief, are:

• The smallest businesses will be exempt from MTD – the “smallest businesses” will be businesses with annual turnover of less than £10,000.
• Taxpayers will send in summaries of their income and expenditure at least four times a year.
• More taxpayers will be able to use the cash basis of accounting.
• Businesses to use only Accountancy Software to control their records

For more details on this upcoming change speak to our Tax Experts.