FINANCE
Making Tax Digital – how can my business prepare?
With the implementation date now on us, you may be concerned about the effect MTD could have on your business. Becki Roberts (pictured), Assistant Manager at leading Nottingham-based accountancy firm UHY Hacker Young, shares everything you need to know about the transition.
In a country fixated on Brexit, it is important not to forget about Making Tax Digital (MTD) – a fundamental change HM Revenue and Customs (HMRC) is making to the VAT return system this month.
WHAT IS MAKING TAX DIGITAL? To improve efficiency, HMRC wants to go paperless so has introduced MTD, which involves keeping digital records and using software to complete tax returns. Announced in the 2015 Spring Budget, MTD aims to reduce errors and create £1bn of extra revenue for the Treasury by 2020.
WHEN WILL IT START? HMRC is phasing in MTD gradually. MTD for VAT comes into effect
from 1 April 2019, meaning all VAT- registered businesses with a taxable turnover above the VAT threshold of £85,000 must submit their VAT returns online. A ‘soft landing’ is being offered
for some VAT-registered organisations, with HMRC extending the deadline by six months for the following organisations:
• Trusts; • Not for profit organisations that are not set up as a company;
• VAT divisions; • VAT groups; • Public sector entities required to provide additional information on their VAT return (Government departments, NHS trusts); • Local authorities;
• Public corporations; • Traders based overseas; • Those required to make payments on account; and
• Annual accounting scheme users. Eventually, HMRC will introduce
MTD for income and corporation tax and it’s expected MTD will be extended to all VAT-registered businesses. The earliest these changes will be phased in from is April 2020. It is worth noting businesses that
are not required to comply with MTD can do so voluntarily if they wish.
WHAT IS MY BUSINESS
REQUIRED TO DO? Currently, many businesses use spreadsheets and/or manual calculations to finalise VAT returns. Under MTD, the expectation is that manual adjustments will need to be digitised. Businesses required to comply with MTD for VAT will have two obligations:
As your logistics provider for temperature controlled goods and general goods within the UK and throughout Europe we can arrange transport 24/7 to suit your needs.
Please contact us for a quote T: 01909 490150 M: 07436 803493
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74 business network April 2019
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