Making Tax Digital: What you need to know

Making Tax Digital: What you need to know

News

 

Making Tax Digital aims to make it easier for individuals and businesses to get their tax right by submitting their tax using compatible accounting software.

Currently the majority of tax returns are submitted using the HMRC’s online VAT portal, which involves manually entering numbers into a sheet. This will be closing to make way for the new Making Tax Digital procedure.

 

Businesses affected:

Under new rules, VAT-registered businesses with a taxable turnover above the VAT threshold of £85k are required to use the Making Tax Digital service to keep records digitally and use software to submit their VAT returns from 1 April 2019.

Businesses who are VAT registered with a turnover of less than £85k may also sign up to the Making Tax Digital rules voluntarily, before it becomes compulsory for them in April 2020.

 

Why is this changing?

It is hoped that by making tax digital, it will:

  • Improve the quality of record keeping
  • Reduce the likelihood of errors occurring by reducing manual input
  • Require less time to gather and input data
  • Make the process more efficient.

 

Useful resources to learn more about Making Tax Digital:

Click here to read about Making Tax Digital direct from the Government’s website

Three podcasts have been released to inform people about Making Tax Digital. Click here to view them.

 

It may be worth seeking advice…

If you are unsure about the transition to submitting your tax returns via compatible accounting software, it may be worth contacting an accountant.

Blackthorns Chartered Accountants recently visited our office to tell us everything we needed to know about Making Tax Digital.

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