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Making Tax Digital (MTD) Is Almost Here – What It Means For You
One of the biggest changes to the accounting industry is on the doorstep: Making Tax Digital (MTD) for VAT. Whilst HMRC began a communications campaign last Autumn, there are still businesses who aren’t quite certain how it will impact them.
With the countdown officially on, you can’t afford to be unaware. Join us as we detail exactly what it means for your accounts.
How MTD for VAT works
The digitalisation of VAT will require data to be kept and submitted electronically using HMRC-approved cloud accounting software. Even if you currently file your tax return using the HMRC portal, this won’t be classed as a digital submission under MTD for VAT.
You may be exempt from MTD, for example if you aren’t currently earning over the VAT threshold. HMRC have published a list of reasonable grounds for exclusion to help you determine if this is the case.
However, most VAT registered companies will have to get ready for the digital switchover to ensure they remain on the right side of the taxman…
The dates you need to know
MTD for VAT is officially coming into play on 1stApril 2019 – although the date it will impact you will depend on when your next quarterly VAT period begins.
For instance, if your next VAT period starts on 1stApril, you would need to get ready for submission on 7thAugust. However, if it begins on 1stMay, submitting electronically won’t be until 7thSeptmeber.
It’s also worth noting that MTD will be rolled out for corporation and income tax later down the line. Whilst the dates for these haven’t yet been confirmed, there is the chance they could be launched in April 2020.
Getting prepared is simple
If you feel concerned about MTD for VAT, then HMRC have eased the process by allowing the use of spreadsheets. The data should then be transferred via bridging software. You’ll need to select a software from HMRC’s list of approved suppliers to ensure it’s compatible. FreeAgent is particularly fitting for small businesses, freelancers and contractors, and QuickBooks suits larger corporate companies.
Whilst bridging software will make the process more straightforward, MTD might still feel daunting. It doesn’t have to be this way – Bright Ideas are here to help you get to grips with the new way of submitting tax. We’re experienced with a broad range of software, and are more than ready for the digitalisation of VAT. Our team will provide guidance to guarantee that your VAT returns are filed compliantly.
So instead of being like the 43% of businesses who are unprepared for MTD for VAT, get ahead of the crowd with Bright Ideas. We can also assist with other aspects of your accounting. From year-end accounts to payroll for employees, the list of ways we can alleviate your tax burden is endless.
Get in touch with our team today – call us on 0161 669 4221, email info@biaccountancy.com, or fill in our online contact form.