Our partner Kathryn Barnes explains more about Making Tax Digital and what it means to you if you’re VAT registered
What is Making Tax Digital?
Making Tax Digital is a phrase you will hear a lot about in the coming months. There’s already a lot of noise about it, but it will reach a crescendo as we head towards April 2019 when the first phase of its introduction takes place.
Chances are that you have already heard about it, but you may not have had a chance to look into it. Making Tax Digital (or MTD as it is known as) is the government’s move to making filing tax returns easier and more efficient by using a fully digitalised tax system.
Businesses will need to use MTD compliant software to do this. For some it will be pretty straightforward and, in theory, will make it easier to keep information as you won’t need to hang on to bits of paper. Others – particularly smaller businesses and the self employed – may be daunted that from April 2020 they will need to file returns quarterly rather than annually.
But if you’re using the software, then it makes updating your information on a daily basis extremely simple and you’ll be less likely to spend evenings and weekends trying to catch up.
If you are VAT registered and your business is above the £85,000 threshold you should already be using accounts software but you will need to ensure that it is MTD compliant. If you are using spreadsheets, desktop software or even manual records then you really need to get everything in place now – don’t delay if you want to avoid penalties!
At Guidon Group we welcome the changes. We understand that for some it is daunting, especially if you’re not a big fan of using IT, but we can do all the hard work for you to ensure that you are MTD compliant and that your data is smoothly migrated across. We will provide training on how to use the new software and are always available to help, especially in the initial transition period.
We believe that Maxing Tax Digital will take the stresses away and free up your time. Just think, no more Christmases and Januarys buried under paperwork or scrabbling around for that lost receipt or mislaid invoice.
We have teamed up with Quickbooks and other software providers to make sure that we are ahead of the curve. You may be worried, but don’t be. It’s going to be so much easier to keep all your papers up to date.
If you are concerned and need further guidance, then you can contact me or my practice partner Tony