Five things businesses need to know ahead of Making Tax Digital (MTD)
Making Tax Digital (MTD) is a government initiative which will require businesses with taxable turnover above the VAT threshold of £85k to record and submit their VAT records digitally with HMRC from the 1 April 2019.
The digital revolution is here to stay and as a business, so is having your accounts in the cloud. There will be very few exceptions according to HMRC.
MTD is the biggest shakeup of the tax system in 20 years – and with just four months to go before the 1 April 2019 deadline, there’s a few things Baldwins can help you with:
- Guidance – Baldwin’s specialists can offer you 1-2-1 sessions to help get you and your business started with MTD.
- Digital Partnerships – Baldwins is a Platinum partner with the major accounting software providers including Sage, Xero, and Quickbooks – as well as other app providers such as Fluidly, Figured and ReceiptBank.
- Outsourcing – you can outsource your digital record keeping to us. Nothing will change, other than the additional time you’ll have to spend on your business, rather than bookwork. We will ensure your MTD submissions are made using the relevant compliant software.
- Client Review – we can look at your existing submission processes (even if you are still using manual ledgers or spreadsheets) to understand where you are now and how we can get you and your business closer to being MTD compliant.
- Upgrades – We can also look at whether your software is suitable or if it requires upgrading or switching to a more user-friendly or suitable package.
Russell Frayne, Head of Cloud Accounting for the West Country region, says: “HMRC has stated there will be penalties for a late submission under MTD. However, there will be a ‘soft landing’ period of 12 months to give businesses the time needed to adjust.
“If you don’t have a clue where to start, still use paper ledgers or spreadsheets for example, don’t have the right software or even adequate broadband, then all these are contributing factors as to why you need to be proactive and start planning now” he added.
“If business owners leave their preparations too late, when the deadline is almost upon them or even passed; they will be playing catch up with MTD implementation, which could then divert their attention from other important aspects of running their business.”
According to survey statistics released in the autumn by the ICAEW, the professional body for accountants, 20% of businesses who needed to implement MTD for VAT had not made any preparations for it.
Michael Hesketh, Head of Tax for the West Country, Baldwins, also added: “Assuming nothing else changes, in the space of a few days there’s going to be the implementation of MTD, as well as Brexit – if it goes ahead – and also the start of a new financial year.
“It could be a stressful time, so businesses need to start planning with their financial advisor right now and not to stick their heads in the sand.”