Making Tax Digital: Where are we now?

November 21st, 2018

Although there have been some calls for a delay to the scheme, with the pilot well underway and HMRC ramping up their awareness campaign, it is clear that it’ll be full steam ahead for Making Tax Digital come April 2019. So, with the rollout just a matter of months away, it’s crucial that your business is prepared for HMRC’s digital initiative ahead of the deadline.

To recap, Making Tax Digital comes into force from April 2019 and will require all VAT-registered businesses with a taxable turnover above the VAT threshold (currently £85,000) to keep digital VAT records and send their returns to HMRC using Making Tax Digital compatible software. Remember, if your turnover drops below the threshold after 1st April 2019, you will still be required to comply with Making Tax Digital rules.

In order to remain compliant, your business will need to keep details of your business’ transactions digitally, as well as submit your VAT return using compatible software. Therefore, if you haven’t already, you should consider looking at software now. Sage Business Cloud Accounting, Xero and Quickbooks are all Making Tax Digital compliant and incredibly business friendly, and we have a number of experts in-house who can talk you through your options to find the right fit for you. SAGE 50 is also Making Tax Digital compliant as long as you are on the most up-to-date version, so now is a good time to review your current software.

Those reluctant to move away from spreadsheets to keep all their business records needn’t worry, as HMRC has confirmed that they are allowed for VAT calculations. However, bridging software will need to be in place to ensure information transfer is fully digital as you will no longer be permitted to enter the figures into the HMRC site from April 2019. Those who use Excel alongside software for their partial exemption calculations can also continue to do so, as long as there is a digital link between the pieces of software used.

The new rules state that those businesses above the threshold will need to keep VAT records digitally from the start of their accounting period, which starts on or after 1st April 2019. However, we would urge our clients to prepare as early as possible, ideally running a VAT quarter through the new system before the deadline. Our client managers are in the process of making sure that all our affected clients are prepared and Making Tax Digital ready as early as possible, to avoid any issues.

If you’re concerned that your business will be left behind, speak to your client manager who will be happy to support you throughout the process.

Keep up to date here with the latest news and developments surrounding Making Tax Digital. You can also find plenty of information within our ‘Help & Advice’ section around the new tax scheme, as well as a handy guide as to whether Sage 50 or Xero is better for your business.


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