Who is affected on 1 April 2019?
All UK businesses that are VAT registered and above the £85,000 VAT threshold will be required to keep their accounting records digitally and submit VAT returns to HMRC with specialised cloud accounting software but Making Tax Digital will not be made mandatory for any other taxes such as income and corporation tax in 2020.
It is vital to establish how you will comply with these new regulations and make sufficient plans and decisions in readiness for these changes.
How will I submit my VAT returns to HMRC?
All eligible businesses must use HMRC compatible accounting software, ‘bridging software’ (mainly for spreadsheet users) or appoint an agent to submit returns to HMRC on their behalf.
Paper records will no longer meet the legal requirements in tax legislation.
Which online software package is best for my business?
There are a variety of MTD compatible software packages available including Xero, Sage Business Cloud and QuickBooks Online.
If you are currently using a compatible cloud accounting software package you are already halfway there. Honey Barrett are experts in cloud accounting and can help you to comply with the new regulations with very little impact to your business.
I’m not VAT registered, will this affect me?
From April 2020 it is expected that all VAT registered businesses will be required to file quarterly tax returns digitally but it will not be made mandatory for any other taxes or businesses. We believe embracing the upcoming changes early is not only the best way to prepare to stay compliant, but also to unlock the key business benefits of effective planning, forecasting and budgeting. By adopting a cloud accounting platform you’ll keep a closer eye on your finances and have advance warning of future tax obligations.
Will there be penalties if I don’t comply?
The government will issue a ‘light touch’ approach to penalties in the first year of MTD for VAT, with no filing or record-keeping penalties to be issued to businesses that are doing their best to comply. There is no soft landing for late payment penalties.
How can Honey Barrett Chartered Accountants help?
Honey Barrett has a team of VAT and cloud accounting specialists who have the knowledge and expertise to make transitioning to Making Tax Digital stress free and simple.
We’re able to advise on and discuss all available options to ensure a proactive approach is taken to address these mandatory changes.
What should I do next?
Contact us today and one of Making Tax Digital Advisors will be more than happy talk to you about Making Tax Digital, or answer any questions you may have.