Are you ready for HMRC’s biggest technological and reporting change to date? Do you know what it is? Do you know what, by law, you will be mandated to do?
As we write at September 2018, there are no Making Tax Digital usable products, but here is a summary of what businesses will be compulsorily required to do from 1 April 2019;
- If you are VAT registered, “digitise” your records - in layman’s terms, keep a computer record of the transactions (on software purchased by you, or for a while, on MTD compliant excel spreadsheets).
- Submit your VAT Return from those computer records.
- Do it via approved IT Software which YOU will also have to purchase and operate - HMRC are supplying no software and are switching off their VAT Portal where you currently enter your VAT Return numbers.
One year later, HMRC theoretically move to similar reporting for Tax Returns - quarterly Returns! Yes, four Tax Returns a year - for VAT Registered businesses, and then for all business and for any individual with untaxed Gross income of over £10,000 per annum (eg Rental income).
OK, that’s one year later – let’s worry about that later too. Given the amount of changes, stops and starts from HMRC, as they encounter how business records are maintained in practice, we don’t yet know how that will develop.
However, the VAT change in April 2019 is real and immediate, and you - a VAT registered business - need to think, plan and get on top of this sooner rather than later.
