From April 1st 2019, all VAT registered businesses and organisations with taxable turnover above the VAT threshold (£85,000) are required to maintain their accounting records digitally and submit their VAT returns to HMRC using compatible software that can access HMRC’s platform.
Therefore, it is important that businesses have taken the necessary steps to ensure compliance. It is vital that businesses have invested in specialist accounting software or bridging software to facilitate the crossover to a full digitised system. To help prepare, HMRC have introduced a pilot scheme for qualifying businesses to test ahead of the Spring deadline.
Making Tax Digital is intended to simplify the taxing system, making it more effective and efficient for taxpayers when submitting critical tax information.
HMRC recognise MTD will make fundamental changes to the way the tax system works and will take many businesses time to adjust. As a result, they have announced penalties will not be recorded within the first year for those who can show that they have strived to comply. Those who are deliberately failing to comply, however, will be subject to the usual sanctions.
If you have any queries regarding Making Tax Digital, how the changes may affect you or how to navigate any issues that may arise throughout the process, please get in touch with your usual Smith Cooper contact, or click here.
Our specialist teams have a wealth of experience, including that gained from working in HMRC, giving us a deep understanding about how HMRC operate, and how to work with them to deliver the best results for your business.
