Yesterday, Chancellor Jeremy Hunt presented his second Autumn Statement, but with a very different tone to the gloomy announcements made this time last year. The Chancellor announced initiatives with a massive focus on pushing growth in the economy. The main question you’ll all no doubt have is… “how does it affect me?”, let’s take a look…
Making Tax Digital – Are You Ready?
16 January 2019
Gavin Hooker
Cloud Accounting, Accounting & Compliance
In just under three months, all businesses that file VAT returns will have to do so online and through dedicated accounting software.
From April this year, for the 2.55 million VAT registered businesses with a turnover exceeding the £85,000 VAT threshold, it will be mandatory to file VAT returns through Making Tax Digital compliant software and not via the current HMRC portal.
The move will require businesses to use Making Tax Digital (MTD) compliant software.
We have been talking to our clients about the HMRC’s Making Tax Digital programme and the April deadline, and it is clear that the Government’s promotion and communication to support this move is not working as well as they would have hoped.
We have found that businesses are just not prepared for this move and some have not heard of it at all! This leaves businesses at risk of potential penalties for non-compliance.
The good news is that at Friend & Grant we are fully up to speed with the Making Tax Digital programme and are already using fully compliant software. Over the coming weeks we will be advising our affected clients of potential changes they may need to make to be compliant by April 2019.
The online filing of VAT returns is the first step in a much larger digitisation programme, which will allow the government to collect personal and corporate tax, however, this will take many years to roll out fully.
In the meantime, these are the key facts you need to know:
- If your turnover exceeds the VAT threshold of £85,000 you will no longer be able to file your VAT returns via the HMRC portal. They will need to be filed via Making Tax Digital compliant software.
- Current providers of Making Tax Digital compliant cloud accounting software include Xero, QuickBooks, and Sage.
- The information to be included in VAT returns is not changing.
- Talk to us about any concerns you may have.
- And do not leave it until April!
Should you have any queries on how Making Tax Digital will affect your business, please contact your account manager who will be happy to discuss your business requirements with you.
The content in this blog is correct as at 10 January 2019. See terms and conditions.
