MAKING TAX DELIGHTFUL…
If you are a VAT registered business with a turnover of over £85,000 then change is coming
We all know that ‘tax needn’t be taxing’ and that ‘there’s nothing more certain than death and taxes’ but the new phrase being used by HMRC and accountants concerns ‘Making Tax Digital’.
HMRC have delayed the launch of this initiative multiple times and the advice out there is brief to say the least.
This might make you think that it isn’t happening or that it doesn’t affect you. However, the launch is coming and it may well affect you.
What is making tax digital all about?
HMRC receive around 12 per cent of VAT submissions through third party software and all the rest are filed through the HMRC website.
The aim of MTD is for all VAT returns to be submitted through third party software uploaded straight from your bookkeeping system.
Why are HMRC doing this?
HMRC believe that too many errors are made when people calculate their VAT manually and then type the figures into their website to submit.
They want businesses to keep their records in digital formats so that the software can transfer the VAT figures without human error impacting on the figures.
What do I need to do?
In order to make your records digital you will be required to use a computerised bookkeeping system. This means that your sales invoices, purchase invoices and bank statements should be entered into computer software. Ideally HMRC would like businesses to keep electronic copies of those documents within the software.
When will this happen?
If you are a VAT registered business you must start submitting your VAT returns through software on your first VAT return after April 2019.
FS Accountants Ltd is a Xero certified Making Tax Digital advisor. This means we can help you assess the simplest way for your business to keep up with this new regulation.
Beyond that, we can help you take this change and make it positive for your business. We are confident that by using tools such as Xero’s bank feed you can cut time from your current bookkeeping system. By using Xero you will be opening up your business to many resources to help you grow and flourish.
The team at FS are experienced in Xero and business development, we can help you use this change to benefit your business.
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