Making Tax Digital21st October 2018
You may have heard of Making Tax Digital (MTD).
Making Tax Digital (MTD) is an HMRC initiative designed to make sure the UK tax system is effective, efficient and easier for taxpayers.
We anticipate that HMRC will be sending out letters to all the affected companies in November 2018. Due to our practice using the Xero and Receiptbank software you are already compliant with Making Tax Digital.
When does it all happen?
What will you need to do to stay MTD Compliant?
Despite all the recent confusion surrounding MTD, it’s not as scary as it sounds. All you need to do is record your taxable records and submit your VAT returns through MTD-compatible software – like Xero
Will you have to maintain all records digitally?
Although HMRC has confirmed the requirements to keep digital records, you can continue to maintain paper documents if you prefer. However, you must keep certain information – such as VAT-related transactions – in digital form. For a complete list of digital requirements, please reference VAT Notice 700/22.
Are there penalties if you don’t participate?
Yes. The penalties in place are the same for MTD for VAT as they are currently for VAT. However, online accounting software like Xero can help you avoid penalties. It is worth noting that new rules are already planned for an April 2020 launch.
Where can you go for more information?
HMRC has published a VAT Notice – VAT Notice 700/22 Making Tax Digital for VAT – with complete details about MTD for VAT, including several examples and scenarios.
If you would like to talk to us about Making Tax Digital (MTD) then please do not hesitate to contact us on (01908) 380391 or email firstname.lastname@example.org