From the 1st of April 2019, all UK businesses will be expected to submit all financial updates digitally to the HMRC using only recognised and approved accounting software.
The Making Tax Digital Initiative is part of the Government’s plans to make it easier for both individuals and businesses to provide accurate financial data to the HMRC.
The Government also hopes that, by storing and submitting all financial records digitally, businesses of all shapes and sizes will find it easier to stay on top of their finances as the process should become more effective and efficient.
It is also hoped that a modern, streamlined tax record system that will not only provide real time filing of individual transactions for the HMRC, but also improve VAT completion.
Who do the new changes apply to?
Once the new MTD regulations come in to force, all businesses that currently have a taxable turnover that is over the VAT threshold will be required to store and submit all of their finances in digital format.
No businesses will be exempt from the new rules as it will be a requirement by law.
What is the current VAT threshold in the UK?
The current VAT registration threshold for VAT in the UK is £85,000.
Once the new MTD For VAT rules come into play on the 1st April, all businesses and individuals that either trade in the UK or overseas, and turnover more than £85,000 will have to maintain and submit all financial records in digital form when required.
So, are you ready for MTD?
If you haven’t already done so, now is the perfect to start thinking about investing in appropriate Making Tax Digital Software for your business.
You should also take the time to ensure that all of your accounting records are up to date and of course, MTD compliant. All VAT policies and practices should also be up to date.
