April 2019 will be a huge month for a lot of business owners. This has nothing to do with Brexit but that HMRC are introducing the Making Tax Digital system for businesses.
What is Making Tax Digital?
Making Tax Digital is a Government initiative aimed at making the tax system more effective, efficient and easier for taxpayers. Business owners will need to keep digital records of their accounting affairs and submit these to HMRC using compatible software.
HMRC are introducing this for VAT and businesses who are VAT registered and have an annual turnover of £85,000 will need to submit their VAT Returns through a digital system for all VAT periods starting after the 1st April 2019.
So, if you have a VAT period from the 1st April 2019 to the 30th June 2019 then this VAT Return would need to be submitted through the digital software.
However, if you have a VAT period for example from the 1st March 2019 to the 31st May 2019 then this VAT Return could be submitted by the old system and then your VAT Return from the 1st June 2019 to the 31st August 2019 would need to be submitted digitally.
Eventually, HMRC will introduce Making Tax Digital for Corporation Tax and Income Tax and at the time of writing this is being provisionally scheduled to begin in April 2020.
Which software should I use?
There are a number of options open to business users to choose from.
We personally recommend Xero Accounting Software, because we have personally used for the last five years for our own accounts and it has been very well received by the clients we have recommended it to in this time.
If you haven’t made any changes in anticipation for Making Tax Digital then I would advise to begin as soon as possible.
The main decision is for you to choose the software you want to use and for you learn how to use the system and if applicable to train the staff you employ.
A lot of businesses won’t have taken any action but if you start making the changes now then you can still be ahead of the game.
My worry with Making Tax Digital is that business owners won’t take any action until the last minute and by then they won’t have time or be able to take professional advice to enable them to submit their VAT Returns by their due dates and subsequently face financial penalties.
We are always happy to meet clients to discuss their Making Tax Digital obligations and of course how we can help them with these matters.
There would be no charge for our meeting and if you feel we could be of help to you or your business then please get in touch.
Get a free consultation
9 Oakwood Rise
01792 – 346222