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Blog | Making Tax Digital & Businesses

Making Tax Digital & Businesses

Tuesday, February 20th 2018 3:01pm

The government are keen on making big changes to the tax system in order to both make it easier for businesses and individuals to track and access their tax information, and for the authorities to monitor and ensure everyone is paying the taxes they are due. It is believed that around £9 billion is lost each year due to tax errors and mistakes, which the government are keen to change. To this end they are rolling out Making Tax Digital. They believe this digital system will help to boost businesses` productivity and competitiveness, and it will also help to deliver cost and efficiency improvements.

Making Tax Digital Being Introduced In 2019

Making Tax Digital InformationAfter consultation they have moved the goalposts somewhat though, and now they have delayed the introduction of Making Tax Digital until April 2019 and it will only apply to VAT. It will then be rolled out to taxes other than VAT in 2020 or possibly later.

Here are the changes that will come into effect under Making Tax Digital in April 2019 (the following has been copied from an article in the Accountancy Age )

`From April 2019, businesses that are registered for VAT and have turnover above the VAT registration threshold of £85,000 will be required to keep digital records for VAT purposes and submit their VAT return to HMRC through MTD compatible software.

Businesses will need to keep the following information as digital records:

  • Business name, principle place of business and VAT registration number (to also include the VAT accounting scheme used by the business)
  • The VAT account showing the audit trail between primary records and the VAT return
  • Details about supplies made and received

Businesses will need to submit their VAT returns using compatible software, which will pull information from the digital records.

Digital records will need to be preserved for up to six years.`

Voluntary Participation

`Businesses that are not required to begin keeping digital records for VAT from April 2019 will still be able to participate on a voluntary basis. HMRC has said that it expects many businesses to move to the system in April 2019 even if not required to do so.

Businesses will also be able to submit VAT data on a more frequent basis than mandated. Voluntary updates submitted outside of the VAT return cycle could be used in situations where a business wishes to notify HMRC of a change in circumstances.`

If you require any help with your tax in relation to your business we are here to help and advise you. We have many years experience and can ensure you take the right measures so you will be totally compliant with any new tax regulations. For more information please ring our offices here in Armagh on 028 3752 2909.

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