Do you have questions about the Making Tax Digital scheme? A Glasgow accountant from the team at The Kelvin Partnership is here to answer all of your questions about digital tax submission.
Digital Tax Submission advice from The Kelvin Partnership
What is Making Tax Digital?
Making Tax Digital (MTD) has been introduced by HM Revenue and Customs (HMRC) to make reporting of taxes for individuals and businesses in a near real time regime. With a reported £9 billion lost annually due to errors and mistakes it is clear to see why they want to plug this hole. This will be done as a digital tax submission through MTD-compatible software. To be able to submit through this system registered taxpayers must have a digital account with HMRC. The MTD-compatible software will include the market leaders. There are no plans to allow digital tax submission via spread sheets, so software will be required.
When does it start?
MTD for VAT will come into effect from April 2019. From that date, businesses with a turnover above the VAT threshold (currently £85,000) will have to:
- Keep their records digitally (for VAT purposes only)
- Provide their VAT return information to HMRC through MTD functional compatible software
It is expected from April 2020 that corporation tax will become part of MTD, with quarterly submissions to HMRC being made digitally. All other non-corporate businesses with taxable income greater than £10,000 and less than £85,000 will eventually come under MTD. However, this is not expected until April 2020 at the earliest although they can volunteer to opt in.
Who is exempt?
MTD does exempt certain businesses from digital tax submissions, these include:
- Who the commissioners are satisfied is a practising member of a religious society or order whose beliefs are incompatible with the use of electronic communications.
- To whom an insolvency procedure, as described in any of paragraphs (a) to (f) of section 81(4B) of the Act is applied.
- For whom the commissioners are satisfied that it’s not reasonably practicable to make a return using an electronic return system; (including any electronic return system that that person is authorised to use) for reasons of disability, age, remoteness of location or any other reason.
What do you need to do?
With the implementation date for digital VAT submissions rapidly approaching, make sure you are using the compatible software! This software will allow digital submission for VAT returns, submission of income and expenditure as well as tax computations.
We can help
Unsure if your current software is MTD compliant? The Kelvin Partnership can help you.
If you are using spread sheets or handwritten cashbooks, you need to change. We can advise on the best software for your needs to make the change as painless as possible!
Worried you will not do the submissions correctly? Why not speak to our team of experts about outsourcing your book keeping to our team of experts. We will help to remove the worry of submitting to HMRC and free up your time to earn more money.