NEWSLETTER – MTD 2019
Making Tax Digital (MTD)
VAT-registered businesses with a taxable turnover above the VAT threshold (currently £85,000) are now required to use the Making Tax Digital system to keep records digitally and use software to submit their VAT Returns for VAT periods starting on or after 1 April 2019 (i.e. your VAT returns for periods ended 30 June 2019 or later). MTD does not affect businesses with turnover of less than £85,000.
What does this mean?
You must enter all accounting transactions (bookkeeping) in electronic format (Excel is acceptable). You cannot do calculations on a piece of paper using your calculator. The electronic bookkeeping must show the input tax and the output tax of each business transaction. Also, you will need to be able to show a clear link between the bank account transactions and the VAT return. Please note that your electronic bookkeeping information for VAT each quarter must be the same as the information submitted at the end of the year for final accounts and Corporation Tax (CT). All submission to HMRC (VAT, final accounts, CT) must match and must be taken from the same original source of electronic bookkeeping records.Practically?
This practically means that either you must start using software compatible with MTD to do your own bookkeeping (and get trained to do it), or your bookkeeping must be done by a professional. We strongly advise you to employ a professional bookkeeper. We now offer a professional bookkeeping service, and a lot of our clients are using it to be compliant with MTD. If you are still not using our professional MTD bookkeeping service, call us for a quotation.Conclusion
HMRC is taking more control on taxpayers, and MTD is another example. We are here to help you deal with those changes. During our long experience in the UK (over 20 years), we have seen continuous changes by HMRC, and we have always helped our clients to stay compliant with the new legislations. It is our privilege to serve you.