What is Making Tax Digital?
The UK Government’s Making Tax Digital (MTD) plans will lead to the biggest change in the UK tax system for decades.
This initiative will help improve the effectiveness and efficiency of the UK tax system and reduce the complexities.
This will be introduced in two mandatory stages:
- April 2019 – Businesses with a turnover above the VAT threshold (£85,000) will have to keep digital records for VAT purposes
- April 2020 – MTD reporting for both income tax and corporation tax has been delayed but it has not gone away. HMRC still expects MTD for these taxes to become mandatory but not before 2020.
What does this mean for your business?
This new system of digital record-keeping and quarterly submissions will commence in April 2019. It will only apply to businesses above the VAT threshold to keep digital records for VAT purposes and submit VAT returns to HMRC through MTD compatible software.
Are you prepared?
If your business is above the VAT threshold, you will need to make sure that your accounting systems have the capability to allow you to fulfil your obligations. For some businesses, this will mean checking that your current software has the capabilities of sending the relevant information to HMRC when the time comes. Other businesses might need to change their digital accounting system, or even start using software for the first time.
Even if your business is not over the VAT threshold from 2019, you may still want to implement a digital accounting system if you do not already have one.
How can Wilson Wright help?
Wilson Wright can help to guide and assist you through this transition, as we:
- Are experts with accounting software that simplifies MTD for businesses
- We can help you with tax planning advice as well as other value add accounting services.
If you would like to discuss what MTD means for your business and how we can support you, please contact us on 020 7832 0444
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