Is your company ready for the start of Making Tax Digital? If you do not even know what this is: then it is highly likely it is not. But does this really matter? Well, yes. It matters because the law and a directive from Her Majesty’s Revenues and Customs (HMRC) is demanding it.
It will come into effect on the 1st April 2019 and it will be applicable to the vast majority of businesses. Any business that has a turnover above the so-called VAT threshold must comply when sending in its tax returns. The current threshold is £85,000 but this figure could change in future budgets.
The key demands on these businesses are clear:
- For VAT purposes, all records must be kept digitally.
- Affected companies must provide its VAT returns information through special software deemed MTD (Make Tax Digital) for VAT compatible. MTD for VAT has a bridging software that is compliant with the HMRC. What the HMRC terms as MTD for VAT compliant.
- MTD will still be available to unaffected companies. These businesses can use MTD for VAT on a voluntary basis. It can be used with great effect on companies that hope to exceed the VAT threshold as its business grows in the future. This software can be applied for both VAT and Income Tax returns.
The software provided helps business keep all its records digitally and reminds them as to when the time is necessary to forward the tax returns digitally and directly to HMRC.
To get your business ready for when MTD for VAT goes live (1st April 2019) you will need to invest in software such as the many compliant packages provided for by BTC Software Solutions.
The software will enable operators to submit and validate the VAT data in a format being demanded by HMRC. This is all achieved at a simple keystroke and the baffling technology is all left to software companies like BTC. This will make the VAT submissions very easy for the business.
The software shows a neat little window displaying key information like VAT and Refunds history. If needed, agents and individuals can refer to historic VAT returns data directly from the HMRC and view it.
This historical look-up feature obviously will not generate until a year after the MTD for VAT directive has been implemented (from 1st April 2020).