Are you ready for ‘Making Tax Digital’?February 13, 2019Olivia Cheetham
Making Tax Digital or MTD, is the Government’s latest legislation which requires companies to file and pay taxes online, as well as digital record keeping. Records show that errors and mistakes made in this sector contribute to £9 billion in lost tax annually. So from 1 April 2019, VAT registered businesses must keep digital copies of all financial records and must use MTD compatible software to submit their VAT returns. It is vital you start preparing for Making Tax Digital if you are VAT registered or close to the threshold. Businesses that are not VAT registered do not have to use MTD software but may choose to do so if they wish.
HMRC have plans to eventually widen the scope of MTD, however, this will not be implemented until 2020 at the earliest. But from April 2019, any business that is VAT registered will have to:
- keep their records digitally (for VAT purposes only)
- provide their VAT return information to HMRC through Making Tax Digital compatible software
HMRC have advised that by using MTD software businesses will experience the following benefits;
- always knowing where you stand when it comes to tax
- having access to tax information online in a single place
- being able to work online collaboratively with an agent
- being able to plan and budget more effectively
Finding the right software for your business can be tricky as you will need it to meet the requirements of the business. There are a lot of companies offering MTD compatible software but in order to be safe, it is best to choose a package from the list of suppliers provided by HMRC. These companies have shown that their MTD software is compliant and works as it is required too. There are over 80 software packages that are available now with many more in the pipeline. Please be careful when choosing a software package and always ensure they are compliant.
In order to assist with the set up of MTD, the Government has released various articles, videos and webinars which are all useful and guide you through the whole process and how to be ready for MTD.
At Easypay, we understand the impacts of MTD and how it can affect our clients and we are ready to support them once the deadline hits. We are the experts in supporting recruitment agencies through 100% funding, back-office support and bespoke advice to suit your business.