Today (1st April 2019), marks the arrival of Making Tax Digital (MTD), HMRC’s new VAT regime which requires all eligible businesses with a taxable turnover above £85,000 to keep digital records and submit their VAT returns using approved software.
Many small businesses will be all set for this requirement and already using software such as Xero or Quickbooks, only needing to worry about registering with HMRC and turning on MTD within their software, to make a submission. HMRC’s step by step guide provides easy to follow instructions on how to do this whilst your software supplier can provide specific instructions for turning on your MTD module.
You may however, be one of the 87% of businesses estimated not to be using software. In this case, there are still a few things you need to do to be complying with your new requirements. Your options are:
- Start using a new compatible software system or;
- Use a bridging software until you can put into place appropriate digital record keeping processes.
Both of the above options will ensure you stay on the right side of the compliance fence and remember, your requirement starts from the VAT period after the 1st April 2019. This means that if your next VAT period does not start until 1st May, your MTD duties do not start until this date.
For all businesses within the MTD regime, our message is not to panic. Advice is available from HMRC or from a trusted advisor, such as ourselves and there is still time to ensure your compliance. Check out or Making Tax Digital Road Map for a visual guide on your next steps.