Making Tax Digital
Making Tax Digital for VAT requires that by 1st April 2019, all VAT registered businesses with taxable turnover above £85,000 to keep records in digital form and file their VAT Returns using digital software.
Today, taxpayers use a range of digital services to manage their tax affairs, and since the inception of Making Tax Easier (MTE) in 2015, Self Assessment tax returns are mostly already done online.
By 2020 more than 50 million individuals and small businesses will have a secure, personalised digital tax account — removing the need for millions to complete a tax return and simplifying the tax system for millions more.
According to Companies House (2018), at the end of June there were almost 4M businesses on the effective register, allowing that a small percentage of these will not be trading above the taxable turnover, that is still a huge number of businesses who must now find and implement software which is capable of keeping and maintaining records, preparing their VAT Returns and communicating with HMRC digitally via an Application Programming Interface (API) platform.
HMRC expects that there will be software products available that will perform all of the functions listed above. Some software programs will not be able to perform all of these functions by themselves. For example, a spreadsheet or other software product that is capable of recording and preserving digital records may not be able to perform the other 2 functions listed above, but can still be a component of functional compatible software if it is used in conjunction with one or more programs that do perform those functions. Digital records can be kept in a range of compatible digital formats. Taken together, these form the digital records for the VAT registered entity.
A9 Accountancy are running a seminar on Tuesday 25th September to discuss the practical issues arising from the new requirements and outline how the MTD strategy is expected to move into the future. Click here to for more information.
Paul Capewell and Ernest Smart from A9 Accountancy will set out the challenges facing businesses in meeting that deadline. As Paul explained: “We will provide an outline of the practical issues arising from the new regulations: which businesses it will affect and when they will be affected. “We aim to give some clarity to the records required to be kept and in which format, and how those records are to be communicated to HM Revenues and Customs (HMRC)."