The HMRC has announced that from the 1st April 2018, all UK businesses will be required to submit all of their financial records in a digital format to the HMRC. It’s important to note that a recognised and approved accounting software will need to be used to submit the information.
The hopes and dreams of the Government are that the new “Making Tax Digital Initiative” will not only make it easier and quicker for individuals and businesses to submit accurate financial data, but it will also provide a more efficient streamlined process that should save businesses time.
Do you know how the changes to Making Tax Digital will affect you?
If you are a business in the UK or overseas with an annual turnover that is over the VAT threshold, you will be required you will need to by law to submit all of your finances in a digital format to the HMRC. No businesses are exempt from the new regulations.
For a UK registered business the current VAT registration threshold for VAT is £85,000 and the new MTD For VAT rules have been devised to make it easier for taxpayers to get their tax right. All relevant VAT return data should also be linked so that it is easier for transactions to be traced from their original source.
The Government believe that by having a more efficient streamlined process will help in providing real-time filing for all individual transactions submitted to the HMRC and improve and optimise VAT completion.
Are you ready?
If you aren’t ready then now is the time to invest in appropriate Making Tax Digital Software, its essential that you do so if your company turns over more than £85,000 and is based in the UK, now is the perfect time to invest in the new initiative which is coming into force on the 1st April.
At the same time, the Government has advised that all businesses should
take the time to ensure that all accounting records are up to date and MTD compliant.
VAT policies and practices should also be up to date and all individuals handling financial processes within your business should be aware of the Making Tax Digital Initiative.