Making Tax Digital
HM Revenue and Customs aspires to become one of the worlds most digitally advanced tax administrations in the world. With the introduction of Making Tax Digital (MTD) it will fundamentally transform the way in which the tax system works. It aims to become more effective, efficient and easier for tax payers to help improve accuracy. HMRC will require considerably more detail than many people are currently recording, for example Making Tax Digital will require daily takings splits rather than weekly takings and purchase invoices recorded separately rather than supplier statement totals.
Making Tax Digital is being introduced on a tax by tax basis. VAT is the first tax under which Making Tax Digital is being implemented and future taxes are to follow. From April 2019 VAT registered businesses with turnovers over the VAT threshold will no longer be able to submit VAT Returns via the HMRC government gateway. Instead the business will be required to maintain digital records using MTD compliant software and submit VAT returns via an Application Programme Interface (API).
Most accounting software providers are now building in the required API or other providers are producing filer software to provide the link. HMRC have advised that spreadsheets can comply as digital records but would require filer software with the API capabilities to deliver the information to HMRC. You are still able to maintain manual records for your own purposes and we as agents can use this information along with your invoices and receipts to generate the digital records required by HMRC.
The second tax to which MTD will apply is income tax. On the 13th March 2019 Philip Hammond announced in the Spring Statement that this will be deferred, as yet to an unknown date. The current consultation document suggests that all businesses with a turnover of £10,000 or more will need to comply with MTD. Initially there will be a three line reporting requirement i.e. Turnover, Expenses and profit but full digital records still need to be kept. Income tax will be reported via four MTD compliant quarterly returns followed by a final submission.
How can we help?
There are lots of different options as to how we can help work with clients to ensure they are Making Tax Digital compliant;
- We can assist in moving you across from manual records to computerised digital records
- We can provide book keeping services on digital cloud based software which you have acces to
- Provision of book keeping services using our in-house standalone software
- Support you with spreadsheet and filer options
We work with multiple software providers and therefore can accomodate clients with a software suitable for their needs.
Catherine A Williams Ltd is happy to work with you to ensure you and your business are Making Tax Digital compliant.
