HMRC has published lots of information related to upcoming mandatory digital tax filing policy. A new HMRC VAT Notice says if you run a VAT-registered business with a taxable turnover above the VAT registration threshold you are required to keep digital VAT business records and send returns using Making Tax Digital compatible software.
The MTD pilot for VAT started in back April 2018 and is now open to VAT businesses and their agents mandated to use the service from April 2019. Joining the pilot now will help you prepare for these changes sooner and your feedback will also help to shape the service as it continues to develop.
If you have an agent, you should speak to them to find out when it may be best for you to join the pilot. It’s important that you have the appropriate software package, so if you already use accounting or record keeping software you should also speak to your software provider to find out when it will be updated for MTD.
The vast majority of businesses will need to do this for VAT periods starting on or after 1 April 2019 if your turnover exceeds £85,000. Businesses with a taxable turnover below the VAT threshold can also sign up for MTD for VAT voluntarily.
Making Tax Digital is an HMRC initiative that will revolutionise the UK tax system and ultimately bring an end to self-assessment. This new digital tax system will require the majority of business owners to maintain digital records using compatible software. Digital Brainchild can assist businesses to acquire compatible software product or set of software products that would support the MTD obligations of keeping digital records and exchanging data digitally with HMRC through the software.