Making Tax Digital and VAT
Making Tax Digital (MTD) comes in from April this year. With businesses above the VAT threshold needing to keep digital records and this could apply to all businesses from 2020. With businesses updating HMRC quarterly for their corporation tax, Income Tax and National Insurance obligations digitally. It is a significant change for many and means the end of the annual tax return with all your information stored in one place.
This change in the way HMRC wants information from tax payers means that you may need to move from your existing desktop or manual record keeping and onto an online accounting package.
How do you make the change?
• If we prepare your quarterly VAT records then there is nothing you need to do. It’s all in hand.
• If you currently use accounting software (e.g. Freeagent, Xero, Sage, Quickbooks etc.) to file your VAT returns then your software should be able to handle MTD.
• If you prepare your own VAT returns then the data will need to be entered into a spreadsheet such as Excel and then filed to HMRC via ‘bridging software’. We are already set up with bridging software so we can file the VAT return on your behalf. Otherwise you will need to purchase your own bridging software.
A quick overview of bridging software can be found here
If you’d like to know how we can help you with this, or with anything else, feel free to call us on 01942 734455 or email me at pb@hca.org.uk
