26 March 2019
Category: MTD
26 March 2019,
 0

With the introduction of HMRC’s move to Making Tax Digital (MTD) just around the corner, Townends Accountants’ Sophie Kwiatkowski asks ‘are you ready’ and gives reassurance that we are here to help if you have any queries about the process.

What is MTD?

MTD will become compulsory from 1st April for VAT registered businesses making annual taxable supplies of over £85,000 per year. Its aim is for everybody to have a digital tax account that is periodically updated to make it easier for businesses and individuals to keep track of accounts.

It’s at the heart of the HMRC’s plans to make Britain ‘one of the most digitally advanced tax administrations in the world’. These new rules aim to make the tax process more effective, efficient and easy.

Who does it apply to?

Making Tax Digital applies to all businesses with a turnover over the VAT threshold of £85,000. For those businesses who do not already maintain records digitally through a cloud accounting solution, they will need to do so by 1st April to avoid penalties.

Whilst only VAT registered businesses and individuals are obliged to comply with MTD from 1st April, we do expect that this will be rolled out to all businesses over time and recommend that those who aren’t subject to the changes now get ahead and think about what you will need to do to be MTD ready when the time comes.

What steps are necessary to become MTD ready?

Businesses won’t need to produce any additional documents or records, you will just need to ensure that you have MTD-compatible software; that you are signed up with HMRC for MTD; and that you submit VAT returns under MTD system from 1 April onwards instead of via the Government Gateway.

From there, all future bookkeeping and accounts should be administered via digital software. Once that is in place, you can regularly update your records which will give you a real-time view of your financial position.

Key benefits of tax going digital

There are many benefits to MTD, which is why so many of our clients have already ‘gone digital’ with tax. We see the main benefits to be:

  • Real time information
  • Less paperwork
  • Time savings
  • Keep closer control over finances
  • 24/7 access to your accounts
  • Aiding preparation of year-end accounts.

Still have questions?

Hopefully this has allayed any queries you may have had but, if not, please get in touch with us by emailing or calling one of our offices.

No business should struggle with the introduction of MTD – we are here to help and will work quickly to help you make any changes necessary.

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