Not sure on something?
Making Tax Digital is the new scheme being launched by HMRC that will affect businesses from 1 April 2019. It’s part of a new initiative to digitalise our tax systems. At Crowther Chartered Accountants, we will work together with you to ensure that your accounting systems are up-to-date and ready to handle the changes.
In the UK, our taxation system is governed and monitored by HMRC, who are looking to modernise and update the current tax system. The concept is that by digitalising our taxation system as much as possible, it will make it more efficient and more effective. This signals the end of paper accounting for UK businesses and individuals as we move into a more technology-orientated system.
Who will be affected?
Making Tax Digital will initially be introduced for VAT. The changes will initially affect only VAT-registered businesses who have a turnover above the VAT threshold (which currently stands at £85,000). Those who have registered for VAT voluntarily will be able to use the Making Tax Digital system voluntarily to begin with.
Making Tax Digital will then be rolled out for Corporation Tax and Income Tax, which will affect companies and individuals no sooner than 1 April 2020.
What will I need to do?
Businesses will be required to submit information electronically using software that is compliant with the new Making Tax Digital scheme. Information regarding company profits, expenditure and revenue will need to be submitted to HMRC on a quarterly basis.
For our clients that are currently registered for VAT, this means that when we complete your VAT return, we’ll need to submit additional information alongside your standard VAT return. Our team of experienced bookkeepers will compile the additional data in the appropriate format, so you won’t need to worry about submitting your information.
We anticipate that many companies will adopt cloud-based accounting software, such as Xero, Quickbooks or Sage 50 Cloud. These accounting software packages are affordable for smaller businesses and can help to streamline the accounting process. If you’re currently using a spreadsheet software such as Excel to calculate your VAT return, we recommend that you upgrade to a specific HMRC-approved software ahead of the transition to Making Tax Digital. Alternatively, you will be able to combine your spreadsheet with third-party commercial software to become compliant with the new scheme.
At Crowther Chartered Accountants, we can provide help and advice on changes brought about by Making Tax Digital. If you’re looking to switch to a cloud-based accounting software, we can help you decide which package will be most suited to your business. As Xero official partners, we’re able to offer a discounted subscription to our clients and can provide training on how to get the most out of the software.
For more information on how we can help you transition to Making Tax Digital, get in touch with our team on 01484 515544 or email firstname.lastname@example.org