Making Tax Digital – what does it mean for me?
From 1 April this year, VAT registered businesses with annual sales of more than £85,000 (exclusive of VAT) will be required to submit their VAT returns digitally. You may think “I’m doing this already” since you are submitting your VAT returns online. But Making Tax Digital takes your filing requirements a step further.
If you are VAT registered and your monthly sales average at just over £7,000 before VAT, then you must retain digital records and submit your VAT returns digitally also. For many businesses, you will already be using accounts software, such as Sage, Xero, QuickBooks or maybe a bespoke product. If your software is properly licensed and all updates have been applied, the process of moving digital filing for VAT should be relatively straightforward.
You may already be using Excel to keep your records on spreadsheets. There is nothing to say you cant do this, but you will need to install what is known as a “bridging software” to digitalise/convert your records to the HMRC required format for onward transmission.
If however, you are like lots of businesses and not presently using software to keep your business records, and you are trading in excess of the £85,000 VAT turnover threshold, then now’s the time to join the digital age and give your business a boost, while keeping on top of your requirements from a compliance perspective.
Some of the benefits of a digital software package to maintain your records are as follows:
- Streamline accounting processes
- Improve efficiency by automating procedures
- Benefit from real time reporting to identify key trends / business performance
- Ensure compliance with applicable laws and regulations
- Lower risk of potential errors
- Instant access and visibility of expected VAT liabilities (no more unexpected surprises!)
If you need advice or guidance on which systems to use, or if you have a system in presently in place but you are unsure what to do to make your business compliant, contact Mark McVey or Danielle McLernon on 028 8772 4697 and we’ll arrange an appointment to discuss how we can help.
Posted on February 20, 2019