Frequently asked questions regarding Making Tax Digital, answered by Stuart Hulland our online accounting specialist.
If you have more questions for Stuart, please do get in touch with him. stuarth@batesweston.co.uk
What is Making Tax Digital – MTD?
The government wants businesses to keep digital accounting records and send tax information directly to HMRC from those records. HMRC will then have timely, accurate records, from which to calculate and recover the taxes due.
What’s in it for me?
Keeping up to date digital records in real time, lets you and your advisors see your current financial position. It helps you to make better business decisions, and lets your advisors/accountants give you better advice. Importantly, you will be aware of the tax you need to pay and be able to plan for the payments. Strong financial control and easy access to your current financial position will also help with obtaining finance should you need it.
There are many software products available that are/will be compatible with MTD. Many have practical features that let you run your business on the go. From anywhere you can access the internet you can reconcile your bank account, send invoices, create expense claims and create and send customer invoices.
What do I have to do?
Get in touch with us to discuss how you can get ready for MTD. The first requirement will be to submit VAT returns using MTD compatible software for all VAT registered businesses over the £85,000 VAT threshold from April 2019.
The more general requirement is to keep your accounting records digitally because you will need to submit quarterly reports to HMRC instead of the old annual tax returns at some point in the future. There will also be a fifth submission at the year end.
What are the deadlines?
MTD will cover VAT returns from April 2019. If you are on an annual VAT scheme this may already apply to you. MTD for quarterly income and corporation tax submissions will follow afterwards. The current deadline is for this to begin for year ends after April 2020. Please note that the quarterly deadlines only give 30 days to submit (current VAT return deadlines are 1 month + 7 days) and returns must be submitted at least once a quarter even if you are on an annual VAT scheme.
How can my accountant help?
Bates Weston can help you to choose suitable accounting software. Depending on the complexity of your business, we may need to add accounting and tax adjustments each quarter or, if your business is simple enough, we may do this at the end of the year.
Once again, if you have any queries on MTD or the steps you need to take, do contact Stuart Hulland.