Making Tax Digital
Making Tax Digital (MTD) is part of HMRC’s plan to transform the current tax system into one of the most digitally advanced tax administrations in the world.
As you may or may not be aware, HMRC has a plan for all VAT registered companies to be submitting their VAT returns using digital software with effect from April 2019.
Following on from that will be MTD for non VAT registered companies and sole traders from April 2020.
For a lot of you that have been used to working on spreadsheets, you will need to find a way of connecting through an API to the new digital portal as the transmission of data needs to done in such a way that it is not manually entered by human beings. HMRC have done this to eliminate errors and hopefully increase their VAT revenue.
You will no longer be able to login to HMRC’s VAT entry portal and input the details of your calculated VAT return in lump sum totals.
I’ll bet that for the majority of business owners all of this is starting to sound a bit technical and might come as a bit of a shock.
HMRC aren’t exactly pushing the details of this with a high level marketing campaign. They are leaving it to the accountants and bookkeepers to transmit the message at the moment. A quick search of the internet will tell you that what I am saying is true.
At FC Bookkeeping, what we are trying to do is ensure that as many businesses as possible are prepared for this dramatic change in accounting practices.
For many of you, we feel that this will be a good time to get help to transition away from spreadsheets and over to online accounting software that is connected directly to your bank as it will eliminate errors and make the VAT return submission so much easier to do from April 2019.
Once we have got the VAT registered companies sorted out, our focus will be on the sole traders to ensure that they are ready for the same principles to be applied to the submission of Tax Returns.
There are many benefits to the business owner from Cloud Accounting so we actually see this as a positive move all round.
Please give us a call to discuss this in more detail and find the right solution for you and in the meantime check out our Cloud Accounting page for how we plan to help you do this.