Making tax digital, the change to the law that every Lancashire business needs to know
Is your business VAT registered with turnover more than £85,000? If so, in less than 12 months’ time you will be required to file your VAT records via the new Making Tax Digital system.
No matter what type of business you are, whether you are a limited company or a sole trader, you will be affected. Making Tax Digital will apply to the first VAT quarter return after 1st April 2019.
If you currently use a paper-based record keeping system this will need to change as the digital element refers to using MTD complaint software. At Rushtons we can help with setting your business up on digital software.
Failure to comply with the Making Tax Digital system will lead to penalties from HMRC for companies who do not submit their records digitally. There is, however, a short grace period to allow businesses time to adjust and become familiar with the new system.
By 2020 the government are hoping to then introduce the next stage of Making tax digital, which will mean every business, self-employed people, landlords and individual taxpayers will be able to manage all their tax liabilities through the digital portal.
For more information see, https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital
Here at Rushtons, we advise that:
- Review your current record keeping method. Is it suitable for Making Tax Digital?
- Alter your system to a digital software well in advance of the MTD start date. Please see https://www.rushtonsaccountants.com/cloud-accounting for various software options. Alternatively, a more simple excel spreadsheet that is “digitally linked” to HMRC may be a suitable option for some. We can advise on the best solution for you.
- Consider matching your VAT return dates with your Accounting period end date.
If you have any questions relating to Making Tax Digital and how to prepare for the change, please email firstname.lastname@example.org or contact Chris Calvert or Liam Pearse on 01772 693111.
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