If you’re a business owner you’ve probably already heard about the government plan called Making Tax Digital. If not, now would be a good time to gather some information as it will affect your company in April 2019. To help you with that, we want to share some answers explaining how it will influence your company, how you can go through the transition smoothly and how we can help you do that.
What is it all about?
Making Tax Digital (MTD) is the UK ’s government initiative that changes the way business pays its taxes to HMRC. The goal of the initiative is to make it easier for businesses and individuals to manage their taxes. The original plan is to transform the tax system by 2020.
! Important note: The rules that apply to VAT are persistent, only the way you can submit your VAT records is changing.
Making Tax Digital for VAT timeline available at gov.uk
Making Tax Digital mandated for all customers (except those that have been deferred).
As we can see in the table, a substantial change will come into force in April 2019 and will apply to VAT-registered businesses (with turnover over £85,000). It’s called MTD for VAT and according to it, mentioned businesses will be required to submit their tax records to HMRC digitally. The old way (via HMRC’s Government Gateway) will no longer be available.
What does it mean for your business?
Businesses will have to submit VAT returns using commercial accounting software. Which means:
Since April 2019 is right around the corner, you need to think ahead and prepare your company for that. The more smooth and effortless transition, the better.
How can you prepare your company?
If you’re already using digital accounting software, there’s no need to worry. Most of the modern software have the option of digitally sending your documents to the appropriate institution.
If you haven’t used it yet – there’s still time to choose the right one.
From the available accounting software, we can see our clients using Xero, QuickBooks, and Sage (with Xero being the most popular one). But to widen your options – HMRC itself provides a list of software suppliers developing software that is compatible with MTD.
! Important note: Unfortunately, despite the fact that MTD for VAT is legally mandated , HMRC will not provide any free software available for MTD for VAT, which means it’s up to you as a business owner to acquire working software able to connect with HMRC.
The goal of UK government introducing Making Tax Digital plan was to create a better, easier way for businesses to manage their taxes. To bring that plan into life, the only thing you need is a proper software that will take care of your company and your taxes for you. April 2019 is right around the corner. Explore your options ahead of time!
Archdesk – modern cloud-based software that covers all the management aspects including project management, price quotation, cost tracking, work schedules – now compatible with i.a
making it really easy for you to finalize the MTD process. You can supervise your project development, workflow, employee management and more – using one modular software tailored to your needs.