Making Tax Digital: April 2019 changes
Making Tax Digital (MTD) is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs. HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world.
The first stage of MTD will commence from April 2019 when businesses will be required to use software to file their quarterly VAT return. This will only apply to businesses who have a turnover above the VAT threshold – others will not be required to do so but may choose to do voluntarily.
The government has committed that it will not widen the scope of MTD for Business beyond VAT before the system has been shown to work well, and not before April 2020 at the earliest.
We recommend the accounting software package FreeAgent. We provide this to our clients as part of our service and the majority of our clients find it very easy to use. We have access to the same information you do and therefore can assist with queries and provide advice based on the current up to date position.
If you are currently using software such as FreeAgent to file your VAT returns then you are already ahead, prepared for the first stage and need do no more at the moment. For those still using Excel and who have turnover above the VAT threshold (currently £85k) you will need to move to using software to file your returns and therefore we would encourage you to start doing this from the beginning of your next accounting year.
If you are registered for VAT voluntarily (turnover below £85k) it is possible that at some point you too will be required to use some type of App or software to file your VAT returns and therefore you might like to take this opportunity to review whether you need to be VAT registered.