Businesses, investors and workers across the UK face a challenging time ahead, as the Government continues to implement its Making Tax Digital initiative.
This landmark change in the recording and reporting of tax will gradually see all major components of taxation taken online, using the latest HM Revenue & Customs-compliant software, apps and programs.
Above are the key dates for Making Tax Digital to help you track your journey and ensure you are compliant with the latest changes.
We know there is a lot to consider, which is why our team have prepared a helpful guide, which is packed with information on the various stages of Making Tax Digital and what you may need to report.
HMRC stipulates that businesses within the scope of MTD must use ‘functional compatible software’ to meet the new requirements.
This means a software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API). The software functionality must include:
Businesses will be required to submit summary totals of their digital records to HMRC at least every three months.
The regulations specify the information a business needs to keep and requires businesses to preserve digital records for up to six years.
Only the total for each type of adjustment will be required to be kept digitally and not details of the underlying calculations.
Businesses within the scope of MTD for VAT are already required to submit their VAT returns using their compatible software. Information for this is pulled from the digital records to populate each VAT return.
There is a minimum of nine boxes required to complete the return, although HMRC permits businesses to include supplementary VAT information as part of a VAT return or voluntary update.
Under MTD, VAT returns need to be filed directly through functional compatible software rather than via the Government Gateway with supporting spreadsheets.
Although not fully outlined yet, a similar system of tax returns or digital summaries will be required for Income Tax and, eventually, Corporation Tax from the various staging dates outlined in our roadmap.
Our cloud software accountants already support clients who use Xero, Sage One and QuickBooks – and we want to help you too.
Cloud accounting packages can ‘future-proof’ your business in readiness for the changing face of Making Tax Digital.
Xero, Sage One and QuickBooks accountancy packages also enable you to share financial information in real-time with our team and quickly produce bills and invoices.
Businesses need to be prepared now for the future, which means seeking out cloud accounting and Making Tax Digital advice sooner rather than later.
Contact us today to find out how we can save your business time and money while making the transition to Making Tax Digital as stress-free as possible.
While the deadlines for the various stages of Making Tax Digital may seem some way off, the changes required to comply with this new tax system are complex and onerous.
Businesses and taxpayers may need to invest in new technology, such as cloud accounting software, and alter their method of recording and reporting accounts and tax information.
We have already helped a wide range of businesses with the initial stages of Making Tax Digital and can assist you by putting the necessary software, apps and procedures in place.
To arrange an initial Making Tax Digital consultation with our team, please contact us.
