Making Tax Digital

Making Tax Digital

Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is more effective, more efficient and easier for taxpayers to get it right.

Want to be ready for HMRC’s “Making Tax Digital” (MTD) changes on 1st April 2019?

Now is the time you should start considering the implication of digital tax accounts and how prepared you are for the new requirements.

This will be of particular concern for business owners who aren’t currently using an online accounting system.

Herridge Accountants can help because we use one of the leading cloud-based software’s called Xero.

Unincorporated Businesses (Sole traders/Partnerships/Property Landlords)

• For larger unincorporated businesses who are VAT registered (turnover above £85,000), Making Tax Digital will come into effect from April 2018.

• For smaller unincorporated businesses who have a turnover less than the VAT threshold, Making Tax Digital will come into effect from April 2019.

Once you’re on the new scheme, you’ll have to electronically submit your records and ensure they are updated each quarter. Paper documents will no longer meet the legal requirements outlined by HMRC.

Limited Companies

Limited companies will gradually be introduced to the Making Tax Digital scheme over a period of time. Quarterly reporting for VAT will start from April 2019, with Corporation Tax the following year in April 2020.

Employees – How can I Prepare?

Businesses will need to keep their books and records digitally and submit information to HMRC every quarter electronically. This might mean changing the way you record transactions, editing your spreadsheets or looking into new software packages to help keep things simple. Herridge Accountants can help you with this.