Making Tax Digital (MTD) for VAT is imminent. VAT-registered businesses with a taxable turnover above the VAT threshold are required to use the Making Tax Digital service to keep records digitally and use compatible software to submit their VAT returns from 1 April 2019.
HMRC released a video on how to sign up for Making Tax Digital for VAT and has also compiled a list of VAT software that is already compatible.
If your business isn’t ready, we strongly advise that you start planning immediately and we would be happy to discuss options with you.
Could your business qualify for a deferral?
A number of businesses may now qualify for a deferral until 1 October 2019 but will need a letter from HMRC to confirm this. Where a business is not in receipt of this but understands that it qualifies, you should contact HMRC and make a note of the call.
The types of businesses that qualify for deferral include:
- Not for profit organisations that are not set up as companies
- VAT divisions
- VAT groups
- Various public organisations and local authorities
- Traders based overseas
- Those making payments on account
- Those with an annual accounting scheme
Finding out more
MTD for VAT is only the first step in HMRC’s digital journey, even though further rollout to income tax and corporation tax is not expected before 2020 or possibly later. Our MTD webpage includes a timeline, further articles and frequently asked questions.
MTD is also an opportunity to review your accounting processes. We work closely with Xero, a leading provider of cloud-based accounting software, as one of their platinum partner firms.
Our clients use Xero to manage their own bookkeeping. It enables them to send sales invoices, accept payments online to get paid faster, upload expense receipts on the go and get a real-time view of their cashflow with Xero’s dashboard.
For more information, please get in touch with your usual BKL contact or use our enquiry form. You can also download our app: it’s updated for MTD and works with Xero and other bookkeeping software too.