Making Tax Digital – Are you Ready?
The introduction of the mandatory online filing of VAT for those businesses with turnover over the compulsory registration limit of £85,000 comes in on the 1st April 2019. This means that all businesses with VAT returns with a quarter ended 30th June 19 will need to file in compliance with the new requirements.
This is the first step towards the implementation of the HMRC digital filing strategy which will eventually cover all taxes.
What will happen
The HMRC will close it’s HMRC online portal so all businesses will need to make arrangements to use alternative means to file their VAT return. An estimated 12% or 1.8 million businesses currently file VAT returns manually using the HMRC portal, (Source: accountancy age 03/10/18).
In addition, from the go live date, all businesses will be required to record their transactions digitally.
Important – note that from the 1st April, it is just the VAT return figures that are being submitted to HMRC not the digital records behind it.
How can you prepare
If you are currently filing your VAT return using the HMRC portal you will need to identify alternative means of meeting your MTD obligations.
You should start by identifying how you will record your transactions and file online sooner rather than later.
If your business has a March 19 year end then you may want to start planning switching onto a online platform from 1st April.
How we can help
We have supported many businesses transition onto online platforms already and can help with the selection of the right one for you, training and getting your data up to date. Contact us now (insert email link) to arrange an initial meeting to start putting your plan of action together.
April 2020 will see the extension of VAT filing to the remaining VAT registered businesses that fall below the compulsory threshold (£85K).