It’s here! The first phase of Making Tax Digital has officially gone live – affecting most businesses with a turnover above £85,000.
However, there are still many businesses that are unprepared for the changes as they aren’t aware of them, they don’t think they are affected, or they are simply choosing to ignore them.
Make no mistake - Making Tax Digital is happening and the onus is on you to make sure you are compliant.
What is Making Tax Digital?
Making Tax Digital is a UK government initiative designed to ensure a more timely and accurate recording and submission of VAT returns.
Who does it affect?
Currently MTD only affects VAT registered businesses with a turnover above the current VAT registration threshold (currently £85,000).
Why are we ‘Making Tax Digital’?
Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.
HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world. Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is:
- more effective
- more efficient
- easier for taxpayers to get their tax right
What do businesses need to do?
If your business is affected by MTD, then you will be required to comply with HMRC’s regulations. If you are still not sure if your business is affected, you can view our MTD chart here.
Choose MTD compliant software
If you are already using software, the changes MTD will bring will be relatively easy but, for those businesses still using cash books, excel spreadsheets or just manually adding up the entries on bank statements, this will bring major changes to how you keep and maintain your books and records.
Although Making Tax Digital may be a forced change it may also be an opportunity to consider what would benefit your business. Software will help you to stay on top of record keeping, allowing you to understand better how your business is performing.
Key benefits can include:
· Simplifying book-keeping
· Knowing where you stand when it comes to who owes you money
· Knowing potential tax and VAT liabilities as soon as possible
· Work online collaboratively with an accountant or book keeper
· Plan and budget more effectively
· Reduced accountancy fees
Want to check your software is compliant? View HMRC’s list of compatible platforms here.
Authorise your software
Once you’ve got your software and Making Tax Digital accounts set up, you will need to authorise the software. This connects the two and will allow you to send your VAT returns digitally.
If you have an accountant, they will be able to authorise this for you.
Help and advice
Ensure that you are setup and supported in the way that suits you and your business best.
Your accountant will be able to help with support, assistance, advice, software, conversion, training and setup.
If you don’t feel like you are getting the right advice or support from your accountant, speak to us about switching today.
It’s as easy as that to begin your digital journey! You can use your software to comply with HMRC’s regulations for digital record keeping and provide VAT return information.
You will also need to use your software to:
- Record business information and records of services/products supplied or received, such as online invoices and sales data
- Send quarterly tax data to HMRC
With a dedicated digital accounting team, we can help you make the switch to digital accounting that will not only benefit your business but will also comply with the new MTD regulations.
Our experts will guide you through our step by step process including:
- Review of your current software and systems in place
- Ensuring you are using the best software for your business that complies with MTD
- Set up of your new software and transferring your existing data over
- Connecting your bank account to your software for a live bank feed
- One-to-one training with one of our experts to show you how to use the software to it’s full potential
Whether you need help with going digital, upgrading your software or changing accountants, our team of experts are on hand to provide everything you need with minimal disruption to your business. For more information visit www.thebusinessstore.org or call 01268770099