Making Tax Digital - the countdown is on

More details of how making tax digital (MTD) will be implemented are emerging.

HMRC has confirmed that initially it will apply to VAT registered businesses with vatable turnover over the VAT registration threshold (currently £85,000).

This means that if a business is voluntarily registered for VAT and has vatable turnover of less than £85,000, it will not initially need to comply.

The initial implementation date of April 2019 covers the reporting of VAT only, and will start with the first VAT period commencing on or after 1 April 2019. Reporting of business profits is likely to follow in subsequent years.

Businesses falling within the new rules will be required to keep digital records and report VAT directly from those records using compatible software.  Where businesses use separate calculations for VAT, such as a spreadsheet, manual imputing of such calculations will initially be accepted, although from April 2020, such records will also need to be digitally linked by bridging software.

Unfortunately this new regime is compulsory (with minimum exceptions).  Penalties will apply to businesses who do not comply.

Businesses who wish to use their accountants to make submissions for them will be able to do so providing the relevant authority is in place.

Lentells are pleased to be able to support their clients in the use of compliant accounting software or by making the relevant submissions on their behalf. 

Please contact us for further details of how Lentells can assist your business.