Businesses need to get ready as digital tax deadline looms
With just over a year to go until the Making Tax Digital (MTD) deadline of April 2019 - there are still a significant number of businesses unaware of the new regime and how it will affect their business.
The main initial focus is VAT only under MTD. From April 1, 2019 it will be compulsory for all VAT-registered businesses above the VAT threshold to store VAT records electronically and prepare and file VAT returns from source to submission using digital format and interface with HMRC’s software system.
All other taxes (income and corporation tax) will not be required to comply until at least April 2020 onwards.
If you have a VAT registered business and currently operate a manual bookkeeping system now is the time to consider moving to computerised records.
The MTD vision is to make the tax system for businesses operate much more closely to “real time”, as opposed to the current system of reporting information on tax returns and paying liabilities long after the end of the tax year.
HMRC has confirmed that businesses will not have to make and store invoices and receipts digitally. These can continue to be in paper form but transactions will need to be stored digitally. Software used must be able to hold digital records, create digital documents such as VAT returns and work and communicate with HMRC software.
Businesses must now start the move and transition over to a fully compliant digital record keeping system whether it is based on cloud accounting or desktop software applications.
At Campbell Dallas we are able to support businesses on many of the cloud/desktop accounting packages available. We have helped many of our clients transition to cloud accounting packages which meet MTD compliance but also simplify administration processes and help their businesses to grow by having real time financial information at their fingertips to identify quickly and easily areas to monitor and/or improve.
Businesses should ensure adequate time is taken to plan, design, implement and test new systems so that they are fit for purpose. Time is now of the essence as the countdown clock to MTD is well underway.
If you would like to discuss what your business needs to do ahead of April 2019 and the options available contact Lee.Hughes@ campbelldallas.co.uk or call 01786 460 030 for more information.
Businesses must start the move...time is now of the essence as the countdown clock to MTD is well underway