Making Tax Digital for VAT
Making Tax Digital for Business was introduced on 1st April 2019 for all VAT-registered businesses with a turnover above the current VAT threshold of £85,000.
The vast majority of VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are now required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns.
“If people are doubting how far you can go, go so far that you can’t hear them anymore.”
What is Making Tax Digital?
Making Tax Digital is intended to bring the UK tax system into the 21st century by providing businesses with a modern, streamlined system to keep their tax records and provide information to HM Revenue & Customs (HMRC).
The first to be affected are small businesses and individuals with a turnover above the VAT threshold of £85,000, who are required to keep digital records for VAT purposes from April 2019.
If you would like us to help you through these changes then call us today on 0740 5344 771 or contact us online here to arrange a free initial consultation.
Why is HMRC introducing Making Tax Digital?
Making Tax Digital is intended to help you better keep track of how much tax you owe – or how much you are due back – throughout the financial year.
- Accurate Tax Information
Replacing paper-based bookkeeping with digital tax accounts will let you check the information HMRC holds about you is 100% correct. - Reduced Errors
Making Tax Digital’s new reporting function will allow HMRC will to look at your tax information almost immediately, reducing human error from data input. - Easier to understand
HMRC anticipates taxpayers will better understand how much tax is owed within the digital tax account – much like online banking. - Easier contact with HMRC
Making Tax Digital will make it easier for you to contact HMRC.
When will Making Tax Digital affect me?
April 2019 – Businesses with a turnover above the VAT threshold (currently £85,000) must keep digital records but only for VAT purposes
2021 – Further roll out of Making Tax Digital is expected to affect small businesses under the VAT threshold.
Please be aware that the above dates – to keep up to date with the latest news about Making Tax Digital, please click here to a receive our newsletter.
We can work with you to prepare for Making Tax Digital. As small business owners ourselves, we fully understand what is required to manage your business records digitally. At CB Accounting & Consulting, we’ve spent a great deal of time training and developing the right support services to help small businesses through this period of change.
HMRC will not be offering software to help you report quarterly, so we will advice you about MTD-compliant software such as Intuit QuickBooks to help make managing your accounting records easy, wherever you are. We’ve partnered with Intuit QuickBooks to offer you an online accounting service that takes the guesswork out of managing your financial business records and allows you to do what you do best – drive sales and grow your business.
If you would like us to help you through these changes then call us today on 0740 5344 771 or contact us online here to arrange a free initial consultation.
If you’re affected by Making Tax Digital (MTD) for VAT, you are not required to register for MTD until you have filed your final, non-MTD VAT return. However, businesses can register earlier if they wish to do so. If you pay your VAT liability to HMRC via direct debit, the banking regulations may also impact your window for registration.
The information provided above is based on current guidance from HMRC and may be subject to change. Please consult with CB Accounting & Consulting before taking any action.
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