Making Tax digitalWhat you need to know and how we can help you be ready for April 2019
What is Making Tax Digital?
Making Tax Digital (known as MTD) is a government initiative aimed at simplifying the way businesses report their income, expenditure and taxes. The idea is that businesses will eventually submit quarterly tax information to the HMRC instead of one annual tax return.
This is going to be a significant change for business and the consultation process has lead to some changes in timescale for implementation. However, the first stage of implementation is only a short time away and it is important that businesses start now to prepare for this.
We need to get ready now because from April 2019, businesses who are VAT registered and with turnovers a the VAT threshold will be mandated to keep their records digitally and provide quarterly updates to HMRC.
Does it affect me?
The first stage of the roll out takes effect from April 2019 where businesses who are VAT registered and with a turnover of above the VAT threshold (currently £85,000) will need to submit quarterly returns through an accounting software that is Making Tax Digital compliant.
At this time, other businesses below the VAT threshold or are not VAT registered can voluntarily opt in to providing the HMRC with quarterly information.
The government has committed that it will not widen the scope of Making Tax Digital for Business beyond VAT before the system has been shown to work well, and not before April 2020 at the earliest. However, it is anticipated that the scheme will at some point in the future be extended to include many more businesses than those who need to meet the requirements in April 2019.
How do I do my bookkeeping to comply with Making Tax Digital?
This will mean doing your bookkeeping on at least a quarterly basis and on a bookkeeping software which is compliant with the new Making Tax Digital requirements.
If you already do your bookkeeping on a software, check with the software provider that it will be Making Tax Digital compliant from April 2019. With some softwares, customers are being asked to upgrade their software to ensure this.
If you don’t already do your bookkeeping and VAT returns on a MTD software, perhaps you do it manually or on a spreadsheet or on an old software, then we recommend that you act now to prepare for Making Tax Digital.
How we can help
We would be very pleased to chat with you.
We provide a free and no obligation individual 30 minute consultation to help you determine if MTD is going to apply to you and explain what you would need to do to comply.
We also provide free webinars where we demonstrate Xero software which is a MTD compliant software so that you can decide if this is the software for you.
If you decide that you would like to use Xero software for your business and to ensure you are compliant, there are then several options for you;
- If bookkeeping is not your thing or you don’t have time in your business, we can take this burden and do it all for you.
- If you want to do your bookkeeping yourself, we provide all the training and support you need to help you do this using Xero software.
If you need help to make sure you are ready for Making Tax Digital, please contact us today
If you feel we can help you in anyway, then you are more than welcome to contact us for an informal chat.
Please give us a call on 01462 455 455 or send us a message using the form below and we’ll contact you to arrange a call or to meet to discuss your requirements.
Making Tax Digital Enquiry
I would like to thank you and Alistair at Cloud Bookkeeping for such a fantastic service keeping my books up to date and providing me with financial reports each month.
With all the receipts, invoices and statements that you take away each month, you also take all the bookkeeping stress and headaches away. Now I can focus on framing and all the things in my business I enjoy doing. HMRC is obviously NOT interested in my creative bookkeeping and therefore Cloud Bookkeeping is just the perfect solution for me.
You are always so patient, really thorough and help me understand this part of my business much better. I can’t thank you enough! I would not have any hesitation to recommend your services to other busy business owners and friends. You make me sing when I think about bookkeeping!Anna-Marie