Making Tax Digital (MTD) Is Almost Here – What It Means For You



March 21, 2019

n

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 1^stApril 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 1^stApril, you would need to get ready for submission on 7^thAugust. However, if it begins on 1^stMay, submitting electronically won’t be until 7^thSeptmeber.

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.

← The Unrecognised Benefits of an Online Accountant How Will The Upcoming Private Sector IR35 Reform Impact You? →

Resources

Recent Articles

Changing VAT details must now be done online

Sep 30, 2024 | Blog

Anyone who needs to make changes to their VAT details now needs to do this online through their VAT online account. Prior to August 5, you could use the VAT484 form, or another postal or electronic method. But this is being phased out. The digital route is more secure...

How to deal with VAT on school fees from January 2025

Sep 23, 2024 | Blog

The new Labour Government will be adding VAT to school fees from January 1 next year, which will increase the bill to parents by 20%, unless schools choose to reduce fees another way to reduce the impact of the extra tax. Private schools have been exempt from VAT on...

Keep good records to avoid a fine from HMRC

Sep 16, 2024 | Blog

Keeping good business records is an essential part of running a business, but it is also a legal requirement when it comes to HMRC. To keep on the right side of the law, businesses and individuals should keep records of their income and expenditure for at least six...

Ready to join us?

Whether you’re a contractor, freelancer, or small business, Bright Ideas can help remove the burden of time-consuming and complex finances. We’ll draw on our years of knowledge and experience earned helping sole traders just like you.

When you choose us, you’ll be assigned a dedicated Account Manager who’ll provide one-on-one support that’s customised to your business. Communication is key, so we’ll always answer your questions or requests as soon as we can. In fact, we offer a same-day response guarantee for emails and calls received before 3pm.