Making Tax Digital (#MTD)

Making Tax Digital (#MTD)

11 Dec 2020

With many business operations taking place online, does it surprise you, that tax returns can still be filed on paper!

This is to be changed with HMRC's new programme of digital filing.  They will be requiring all businesses and organisations to maintain digital accounting records using cloud based software that is compatible with HMRC's systems.

The Making Tax Digital (#MTD) programme will eventually apply to all types of tax, beginning with the MTD for VAT regulations coming into force from the 1st April 2019.  MTD for Income Tax, MTD for Corporation Tax and MTD for individuals is planned from 2020 onwards.  

HMRC hope to become one of the most digitally advanced tax administrations in the world, and to improve and simplify the process of completing tax returns, they are moving UK businesses towards a digital tax system.  Under the new regulations, all VAT registered businesses and organisations who are above the VAT threshold of £85,000, will have to comply with the digitisation by the 1st April 2019.  This includes sole trades, partnerships and limited companies.  There are exceptions to the deadline, which are charitable trusts, such as not-for-profit organisations that are not set up as a company, VAT divisions and groups and public corporations. The deferral is for six months until October 2019.

If you submit your VAT returns by logging into HMRC's online portal, it is important to make the move to digital as soon as possible.  Here at PA Bookkeeping can help you with the move, to a cloud system or we can submit them for you, as you will not be able to submit your VAT returns using the HMRC  online portal directly, which unfortunately could result in late filing penalties. 

We can help you choose the right cloud based software for your business, as there are so many to choose from such as Quickbooks online, Xero and others which we are fully conversant using, and can give you advice and a guiding hand to help with the process of setting up and using.  Why not give send us a message or email, for a chat and make the move to Digital cloud base systems.