Making Tax Digital
Making Tax Digital (“MTD”) is the HMRC initiative aimed at eventually requiring all businesses to file direct from computerised accounting records quarterly returns of income and expenditure.
MTD has suffered a number of delays and is now being introduced more gradually and later than was originally envisaged. The first entrants into MTD will be the filing of VAT returns on or after 1 April 2019 although it has been announced for Group VAT registrations implementation will be delayed by six months.
You will find below information on the implementation of MTD. For further information contact us directly.
It’s Time for Action!
The first VAT return starting on or after 1 April 2019 for businesses over the VAT threshold will need to keep hold of records digitally and file their VAT return using MTD compliant (or bridging) software. A delay of 6 months to 1 October 2019 has been announced for a select few including VAT Groups.
What does this mean to you?
This will apply to VAT registered businesses with taxable turnover in excess of the VAT threshold, currently £85,000.
Changes to record keeping?
You will be required to maintain digital records to meet the new requirements which will form part of the submission of your VAT return.
Changes to systems and controls?
If you do not use a MTD compliant software already, you must switch to do so by your first VAT return after the deadline or use a ‘bridging software’ to allow you to submit future returns to HMRC or contact us to assist with your submissions.
You are now also required to keep ‘digital links’ between your business records and your submissions to HMRC.
Changes to VAT return submissions?
The filing and payment deadlines remain unchanged but there may be penalties for non-compliance with the MTD regulations.
After MTD for VAT has been implemented, MTD for income tax (for the self-employed and those with income from property) and MTD for corporation tax are expected to follow, but not before April 2020 at the earliest.
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