Let’s Make Tax Digital

Making Tax Digital for VAT has started, all VAT registered Business with a turnover above the £85k threshold will either join MTD from the first month or quarter (depending on whether you do quarterly or monthly VAT returns) starting after 1st April 2019 or for those qualifying for the deferred period, they will start in first month or quarter after the 1st October 2019 (its estimated only 3.5% of VAT registered business qualify for the deferred period).

In  the UK there are 2.7m VAT registered businesses, 1.8m have been filing via the HMRC portal and 1.2m businesses are over the VAT threshold. VAT generates 21% of the UK’s tax.

The portal will no longer be available for those who are within the scope of MTD and as a result 89% of businesses will have to change the way they file VAT.

Under MTD you have to file using approve API compliant software https://www.youtube.com/watch?v=LDGxLwEc1OM&feature=youtu.be

Many businesses will find that their software is not compliant and as result will choose to either change/upgrade or use Bridging software. Bridging Software is often spreadsheet based and with either import CSV/Excel files from your current system or allow you to set up formulae to link data and create the necessary digital links to pull data through to the return for submission.

Over the last couple of years I have been training accountants and more recently multi million large business in how they can meet the new MTD requirements.

Even though businesses may have some pain in order to change, in the long term MTD is expected to help business and HMRC to become more efficient and reduce errors.

Is your business ready for MTD?

 

 

 

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