Back in 2015, the government set out its vision for a transformed tax system and published a Making Tax Digital roadmap to make fundamental changes to the Tax system by 2020 – to become more efficient, simpler and easier for tax payers.
From April 2019 businesses above the VAT threshold (£85,000) will be required to keep their records digitally and provide quarterly updates to the HMRC for their VAT.
The Making Tax Digital requirements will only apply to all VAT registered businesses for VAT obligations only from April 2019. The Government have decided not to widen the scope beyond VAT before the new system has proved to work and not before April 2020 at the earliest.
What does this mean for businesses?
89% of businesses will have to change the way they submit VAT
Making Tax Digital is a modern, digital service that will help businesses get their tax right, currently even compliant businesses find this hard, with taxation errors and mistakes found in every sector with £9 billion lost annually. Keeping records digitally will result in more timely and accurate record keeping.
HMRC are also expecting there to be more business benefits such as:
• Always knowing where you are when it comes to tax
• Having access to tax information online in a single place
• Being able to work online collaboratively with an agent
• Being able to plan and budget more effectively
• Allow businesses to integrate tax into day to day record keeping
All VAT registered businesses will need to ensure they provide their VAT information to HMRC through Making Tax Digital compatible accounting software.
How Timewade can help
Timewade Ltd are an accredited Sage partner and if your business is considering compatible software please talk to us about the benefits of Sage 200cloud and Sage 50cloud and how they can help you become compliant for Making Tax Digital.
Sage are committed to making sure their cloud and cloud connected products are MTD ready.
For more information about Making Tax Digital: