Making Tax Digital – everything you need to know
You’ve seen the TV adverts, heard the phrase many times but what exactly is Making Tax Digital?
Making Tax Digital (or MTD as it likes to be known) has been introduced by HMRC to get tax information from businesses and individuals in a more standardised digital format.
What this means is that, unlike in the past when tax submissions could be made in paper form or via the HMRC online portal, they now need to be submitted to HMRC using your own software.
Which taxes does this apply to?
At the moment this only applies to filing VAT returns but HMRC are already rolling out a test pilot for income tax so you can expect this to follow in the near future with other taxes not far behind.
Do I have to do it?
If you are a business above the VAT registration threshold (meaning you are already required to submit VAT returns) then you will almost certainly need to use MTD. There are some exceptions – so just give us a call if you are unsure.
How do I do it?
The first thing that you have to do is register. You can do this via the HMRC website – but be aware you need to sign up at least 72 hours before your return is due. Looks a bit daunting, right? Contact us – we’re here to help!
Once you are all signed up, you then have a few choices:
- Use MTD compatible accounting software. If you are already using a well-known accounts software package (like Sage or Iris) then it should be able to do this. You may need to update the software so that it is on the latest version first. If you’re in any doubt, contact your software provider.
- Use a bridging tool. If you don’t use accounts software or yours isn’t MTD compatible, then you can buy a bridging tool that can take an Excel spreadsheet and convert it into an MTD submission.
- Outsource your accounting to Hayhursts! We’re totally software-savvy and have already submitted [what feels like] thousands of returns in this way. What’s more, we have a bridging tool for clients using spreadsheets, so we can submit based on Excel based data too. Don’t stress – let us carry the load.
Help – I don’t know what I’m doing!
Firstly, don’t panic. You are not alone – we’re here to help. HMRC have been quite friendly about businesses starting down the MTD road and so you may get some leeway about meeting the new MTD requirements. That said, their patience can only last so long…
So, if you are in any way unsure about what to do, how to do it or what it means for you, get in touch with Hayhursts. We can really help. With years of experience and knowhow, we’re already providing this service for many businesses nationwide, and rest assured, we know what we’re doing.