VAT: Making Tax Digital – are you ready.
From April 2019 all VAT registered businesses will be required to:
- Keep records for VAT purposes digitally
- Provide VAT return information to HMRC through Making Tax Digital compatible software
In other words, businesses will no longer be able to submit their VAT return by manually filling in the figures on the HMRC government gateway page which around 80% of businesses currently do. Instead records must be kept using commercial accounts software and the VAT return submitted directly via the software.
HMRC state this will result in more accurate and timely record keeping and will help to prevent errors. It will however be a big change for businesses who currently use spreadsheets or other manual methods of record keeping and submit the VAT return manually.
There are many good accountancy software packages available through which businesses will be able to meet the MTD filing requirements. Three of the biggest are Sage, Xero and FreeAgent and which one works best for you will depend on your specific circumstances.
If you need to transition to accounting software, then don’t leave it until the last minute – act now and this will give you plenty of time to have the software up and running in time for the deadline.
If you need help with MTD or any other accounting or tax issues please do get in touch with us.