Pre­par­ing for HMRC’S dig­i­tal changes

Belfast Telegraph - Business Telegraph - - News - In­di­vid­u­als and busi­nesses in­ter­ested in find­ing out more can book a free ini­tial con­sul­ta­tion by con­tact­ing Tom Pen­man on 028 9032 3466 or e mail tom­pen­man@ bak­er­tillymm.co.uk

Tom Pen­man, Tax Part­ner at Belfast-based in­de­pen­dent ac­coun­tancy and ad­vi­sory firm, Baker Tilly Mooney Moore, ex­am­ines the up­com­ing HMRC’S Mak­ing Tax Dig­i­tal (MTD) project and asks if your busi­ness is ready.

“It seems like a life­time ago, but back in 2015 the gov­ern­ment an­nounced its in­ten­tions to make tax re­turn fil­ing dig­i­tal and, af­ter a few de­lays, part 1 of the project is very nearly here.” ex­plains Tom.

“The orig­i­nal plans have been wa­tered down but for VAT re­turns with pe­ri­ods start­ing on or af­ter 1 April 2019, VAT reg­is­tered busi­nesses with sales on or above the VAT regis­tra­tion thresh­old (£85,000), will be re­quired to keep records in dig­i­tal form and sub­mit their VAT re­turns us­ing MTD com­pat­i­ble soft­ware. This can now in­clude spread­sheets, pro­vided that ad­di­tional soft­ware is used to make them com­pat­i­ble with HMRC sys­tems.”

“There are very few ex­cep­tions to these rules and the vast ma­jor­ity of busi­nesses in this cat­e­gory will need to com­ply,” added Tom.

Ac­cord­ing to Tom, HMRC be­lieves that it is com­mon­place for ac­count­ing and busi­ness in­for­ma­tion to be stored dig­i­tally, and as such for many busi­nesses the change will help speed up the VAT re­port­ing process. But, he ex­plains, in the fi­nance world it is con­sid­ered that far fewer busi­nesses and even ac­coun­tants are pre­pared for this change than HMRC seems to think.

“Busi­nesses that keep their fi­nan­cial trans­ac­tion in­for­ma­tion in writ­ten form and/or that are us­ing spread­sheets, will def­i­nitely be re­quired to make changes to their pro­cesses and could be the busi­nesses most af­fected (although not ex­clu­sively) by the in­tro­duc­tion of MTD,” he ad­vises.

“In any case, the dig­i­tal­i­sa­tion of ac­count­ing in­for­ma­tion and tax com­pli­ance is hap­pen­ing re­gard­less of whether busi­nesses are ready for it or want it,” Tom con­tin­ues.

“Whilst HMRC has still to for­mally con­firm that the MTD will take place from April next year, the team at Baker Tilly Mooney Moore urges all busi­nesses to en­sure that they have a firm un­der­stand­ing of their cur­rent pro­cesses and a con­sid­ered plan to en­sure they are able to com­ply with MTD. Fail­ure to do so could re­sult in cost and dis­rup­tion to the busi­ness, which, when added to the cur­rent un­cer­tainty of fu­ture trad­ing con­di­tions, would be best avoided.”

HMRC is run­ning a pi­lot pro­gramme which VAT reg­is­tered busi­nesses can ap­ply to be part of be­fore the full MTD goes ahead.

Baker Tilly Mooney Moore is a very ex­pe­ri­enced ac­coun­tancy and ad­vi­sory firm, renowned for its first-class cus­tomer ser­vice. With a spe­cial­ist team of ad­vi­sors cov­er­ing ev­ery­thing from VAT and book­keep­ing ser­vices to per­sonal tax­a­tion and cor­po­ra­tion tax, busi­nesses us­ing their ser­vices can en­sure the in­ci­dence of tax­a­tion is min­imised.

“Our ex­pert team can re­view clients’ sys­tems and ad­vise on the most ap­pro­pri­ate changes or soft­ware pack­ages for them as well as pro­vide ad­vice on all as­pects of tax,” said Tom.

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