What is Making Tax Digital?

From 1st April 2019 HMRC will be introducing Making Tax Digital for VAT. This is part of HMRC’s long term plan to make the tax system faster and more efficient. It may have a big impact on the way you currently keep your records.

The biggest difference is that each individual transaction will now have to flow straight through to HMRC, as opposed to being able to enter a total figure directly onto the VAT return. The first VAT quarter this will affect is April – June 2019, with the first MTD filing due on 7th August 2019.

What Do I Need Do?

If you currently use any mainstream accounting software such as Sage, Xero or Quickbooks then it is likely that you are already MTD compliant. We recommend that you contact your software provider to ensure that you have the latest version installed and that you will be ready to file once the changes come into effect. If we currently do your bookkeeping on Sage then don’t worry, as we will be taking care of this for you.

If you are using spreadsheets or keeping paper records, then you will need additional software to file future VAT returns.

We have chosen Xero as our preferred software solution for Making Tax Digital and William Price & Co is now an official Xero partner. Its useful features such as a direct bank feed, as well as being more forgiving and easier to navigate than some of its competitors, give us the ability to provide businesses with much more up-to-date information.

If we are already filing your VAT returns, then we will be in touch shortly to discuss how the changes will affect you.

If you currently file your own returns, then you will need to look at implementing an accounting software such as Xero or Sage. There are also bridging software packages available online that can be used to link Excel spreadsheets to HMRC filing.

If, however, you are one of the large number of people who feel that the increased workload means that keeping your own records is no longer the most effective use of your time please give us a call to find out how we can help.

Whatever you choose, William Price will be here to support you. There is no way to avoid MTD and, although it is now only applicable to businesses with turnover above the VAT threshold, over the next few years it is likely to become a legal requirement for all. If you have any queries or would like further information, please do contact us to discuss how we can help.

Full details and future updates can be found here on the HMRC website.