Using spreadsheets to keep your books and filing VAT via the HMRC portal will be a thing of the past as of April 2019.
Making Tax Digital (MTD) is a government initiative to move taxation online, affecting most businesses from 1st April 2019.
Registered businesses will have to maintain digital VAT records / submit returns to HMRC through MTD compatible software.
Making Tax Digital – The Benefits
- MTD in relation to VAT shouldn’t present problems for the majority of businesses – Nothing fundamental has changed as most UK businesses already report / pay VAT quarterly.
- It’s easier to submit returns via online accounting software
Who is Affected From April 2019?
If you’re VAT registered, or close to the VAT threshold (currently £85,000) and don’t use digital accounting software / currently submit via the HMRC portal, you need to start preparing for MTD now…
What Does This Actually Mean?
You will no longer be able to prepare / file VAT in this way – It’s critical you prepare to avoid HMRC penalties.
- Put simply, if you calculate VAT manually and submit (via the HMRC portal) and / or send to an accountant to submit, you’ll need to select MTD compliant software and use to calculate / submit VAT returns directly.
What Do I Need To Do?
- Software selection – Ensure software is MTD compliant – Please see below for guidance – https://www.gov.uk/guidance/software-for-sending-income-tax-updates. We can help you select the best software and guide you through migration. Contact us here
- Bookkeeping – Ensure you’re confident to prepare accurate VAT returns – This is critical for both compliance and tax efficiency – if you get it wrong you could lose out financially and or be subject to HMRC penalties – It’s worth drafting in the experts! Contact us here
Let Fairmile Do The Hard Work For You….
- If you’re a Fairmile client – Don’t worry – We have it covered, you don’t need to do a thing – The software we use is HMRC compliant and we’ll integrate new technology introduced by HMRC – You won’t spot the difference!
- If you aren’t yet a Fairmile client – We’re here to help migrate to digital software such as Xero and support you with bookkeeping to ensure both compliance and tax efficiency – We’re also offering a Free Xero Software account for 12 months to all new clients. Please contact us for us for more information.