Making Tax Digital (MTD) in 2019 – Is your business ready?
I am sure you have now all heard of Making Tax Digital (MTD), but I would like to give you a guide on who this affects and what you need to do….
MTD is an overhaul of the UK VAT system which replaces manual processes with digital ones.
Who this affects depends on the size and type of business that you operate. HMRC is doing a gradual roll out of Making Tax Digital, starting with Making Tax Digital for VAT. The first businesses to be affected will:
be VAT registered
have a taxable turnover above the VAT threshold (currently £85k) when MTD begins.
Businesses who are already exempt from filing their VAT returns electronically, are also exempt from Making Tax Digital for VAT, unless they choose to take part. They can do this by informing HMRC in writing.
Over 96% of businesses affected by MTD need to start following the rules from the beginning of their first VAT period, starting on or after 1 April 2019.
This includes businesses whose revenue exceeds the VAT threshold during the year, so keep an eye on your turnover. It is worth knowing that once you have gone over the £85k threshold, you will always be required to follow the rules for MTD, unless you deregister from VAT.
Businesses complying with MTD for VAT will need to keep and preserve their VAT records in a digital form. They will need to file their VAT returns quarterly (or more frequently), using HMRC-recognised software fo MTD.
A big change like Making Tax Digital is bound to bring some uncertaintly. However, Charnwood Bookkeeping uses MTD software like QuickBooks, so meeting your tax obligations will be a simple and transparent process. That means less time worrying about your taxes and more time growing your business.
Contact us for a chat on how we can help your business move painlessly to Making Tax Digital.
Wishing you all a Happy New Year and a successful 2019!