Making Tax Digital - Are you ready?
The Government is phasing in its Making Tax Digital (MTD) regime, which will see all taxpayers move to a fully digital tax system. All businesses and individuals will be required to register, file, pay and update their information via a secure online tax account.
Businesses with a turnover above the VAT threshold of £85,000 must keep digital records for VAT purposes and use MTD 'functional compatible software'. Functional compatible software means a software programme that meets the new requirements including:
- Keeping records digitally.
- Preserving digital records in digital form.
- Creating a VAT return from the digital records held in the software and providing HMRC with this information digitally.
- Providing HMRC with VAT Data on a voluntary basis.
- Receiving information from HMRC via API platform that the business has compiled.
Firms are required to keep digital records in a range of compatible software programmes; the use of manual spreadsheets is not allowed. HMRC has clearly stated that copying by hand or manual inputting is not permitted and cut and paste will also not be acceptable.
Is my accounts software MTD compatible?
Unless you have the most up to date version of your accounts software this is unlikely. Various versions of Sage are MTD compliant as is QuickBooks online and Xero. A number of our clients are upgrading their software packages to ensure they meet the MTD requirements.
We can help
We can offer you advice and help you to upgrade your software to ensure you are MTD ready. We also provide training to ensure that you can use the new functional MTD compatible software.
For further information on MTD please contact Dawn Bevan on 02920 734100 or email email@example.com
Read our Making Tax Digital Fact Sheet