Making Tax Digital: A Guide for Our Clients
Making Tax Digital (MTD) is the UK government’s initiative to take all tax submissions online and enforce digital record keeping via computer software. Every VAT-registered business in the UK above the £85k threshold will take part by keeping digital records and submitting returns using compatible software from 1 April 2019. Other forms of business tax will follow in 2020 and thereafter.
Xero software is fully compatible with MTD for VAT.
The new rules mandate that VAT-registered businesses with a taxable turnover above the VAT registration threshold must from 1 April 2019:
- Keep records in a digital form
- File their VAT returns via MTD-enabled software.
Making Tax Digital will make it easier for individuals and businesses to get their tax right and keep on top of their affairs. It will also transform HM Revenue and Customs (HMRC) into a world-leading digital tax authority. Ultimately, it will make life easier for everybody.
- Only businesses with a turnover above the VAT threshold, currently £85,000, will have to keep digital records and only for VAT purposes
- They will need to do so from April 2019
- Businesses will not be asked to keep digital records or update HMRC quarterly for any other taxes until at least April 2020.
We can provide you with an effortless transition to MTD and you can also download a free guide to find out what you need to do to prepare for it. Together we can enable your business to ease itself into the process with the minimum of fuss and stress.