HMRC are introducing Making Tax Digital. Part of the government’s plans to make it easier for individuals and businesses to get their tax right. From 1st April 2019 this will apply to VAT registered businesses with a taxable turnover above the VAT threshold. They have delayed this for income tax and corporation tax.
In this article, we answer the main questions that can help you to understand what this means for you and your business.
Why is this happening?
HMRC want to make submitting tax information quicker and easier. By making this all digital, it will improve the efficiency and overall accuracy of the tax information submitted.
Who will this affect?
VAT registered business who have a taxable annual turnover of over £85,000. From 1st April 2019 you will need to submit your VAT information digitally. If your VAT return crosses this date, submitting digitally will start from the following quarter. For example, if your VAT period is March-May, you would start from 1st June.
What do you need to do?
The first thing you can do if not already is start using cloud based accounting packages like Xero, QuickBooks and Sage. These systems can communicate with HMRC when submitting your VAT returns. They also have the added benefit of storing all your financial information and copy invoices and receipts in one place that can be accessed from anywhere.
If you would rather not make the move to using the cloud, you can alternatively use bridging software and there are many out there on the market to choose from. This method would be especially good if you use spreadsheets for accounting. The bridging software takes your data and submits the VAT return in the correct format to HMRC.
Who can help me?
We can! At Designated we have a fantastic team of virtual qualified bookkeepers and finance managers who can help from as little as £31 per hour (exc VAT).
We can assist you with everything from basic bookkeeping right through to submitting the VAT return to HMRC. This can be done through your own compatible accounts package, through bridging software or we can set you up and fully manage your accounts on our cloud based systems.
Making Tax Digital…
We are more than happy to discuss how we can support you with Making Tax Digital and other areas of bookkeeping and financial management.
Register and get started with your very own Designated Finance Manager.