News has been released that HMRC has re-phased the timescale of it’s Making Tax Digital (MTD) initiative, giving small business owners and their accountants extra time to get ready. The initial timetable had scheduled a gradual introduction starting as early as next year.
How will Digital Tax affect you?
- Once introduced businesses must keep digital records and make quarterly “update submissions” of these records to HMRC.
- Businesses with a turnover above the VAT threshold (currently £85,000) will now have to do this from 2019 but only for VAT purposes (a year later than previously planned).
- From 2020 other businesses and companies will then be subject to the initiative but can take part on a voluntary basis before then. Information beyond VAT returns will start to be submitted to HMRC.
What this means for you…
VAT Registered? – Quarterly submissions may be nothing new to you. But remember that you will have to ensure data is stored digitally. If you aren’t using a software system for your accounts you will need to start to do so.
Not VAT Registered? –submitting information to HMRC every quarter rather than annually is likely to cause a massive change in the way you manage your business. Don’t bury your head in the sand – get the help of a good accountant as early as possible so you can rest easy, be prepared and avoid penalties.
Get Ahead and adopt Cloud Accounting Now! – The good news is that at Davis Grant we specialise in helping our clients get to grips with new computerised accounting systems and practices. Confidently lead your business into the future with the support of our team.
A lot of the detailed regulations are yet to be determined but what we know for sure is that digital tax is coming, whether we like it or not.
We think it is potentially the most radical change the tax system has undergone EVER. We are getting ready… are you?
If you have any concerns or questions please get in touch with our expert team.
Get our free cheat sheet on surviving the changes…