1st October 2018
Preparations for a deal/no-deal Brexit may be taking the headlines at the moment but we shouldn’t let that one issue distract from other business imperatives. And there is one such initiative which is looming ever closer: Making Tax Digital (MTD).
It’s fair to say that this initiative has had a somewhat stuttering start. Originally proposed in the 2015 budget it was dropped from the Finance Bill in April 2017 only to be reintroduced following the June election in the same year. In the process the timetable has been extended with phased introductions now due to start with effect from 1 April 2019.
First off the starting blocks will be those businesses whose turnover is over the £85,000 VAT threshold. That is because from 1 April 2019 quarterly VAT reporting switches to the MTD system. The current option of manually inputting VAT information into HMRC’s systems will disappear with businesses being required to maintain and upload VAT records using ‘functional compatible software.’ Further phases will extend the project to encompass other returns but these will not impact businesses until 2020 at the earliest.
Some businesses who already make use of proprietary accounting software may find that their system is already compatible with MTD for VAT. Others, particularly those who currently rely on spreadsheet accounting systems, may have to take steps in order to ensure that they are compliant with the new requirements.
In an update on MTD published on 17 September the Government commented that they intend to make a list of compatible products available later this year when the current pilot project is opened up to additional users. In the meantime they have published details of those companies which are working in tandem with HMRC in developing new software.
Next April may seem a long way off but businesses need to act now if they are to ensure that their current systems are compliant or to source and introduce new accounting procedures. Although HMRC has promised a ‘soft landing’ for the first twelve months, that doesn’t mean that businesses can afford to delay implementation.
In order to help businesses with their preparations Thompson Jenner LLP are running a series of free MTD for VAT seminars starting with one in Exmouth on 11 October followed by Exeter on the 30th October. These will provide an overview of the Making Tax Digital initiative, what this means for businesses and how we can help businesses to comply with the new requirements for VAT reporting. Accounting software specialists Xero will also give an overview of their compatible system.
Thompson Jenner LLP Partner Jon Westley said “The thought of potentially altering accounting systems can seem daunting but by preparing early businesses can ensure that their people and systems are ready to meet the new requirements by 1 April.”
He went on to say “MTD represents a fundamental change to the way businesses keep their records. As accountants and business advisers with cloud accounting expertise, we are ready to help and advise businesses in regard to meeting their MTD requirements.”
If you would like to find out more or meet to discuss the cloud accounting services which we are able to provide, please contact Jon Westley or one of our Partners on 01392 258553 or 01395 279521 to arrange a free initial meeting.