The Making Tax Digital (MTD) countdown is on. Here is a summary of the plans for MTD to help you prepare:
• From April 2019, businesses and landlords that are registered for VAT and have a turnover above the VAT registration threshold of £85,000 will be required to keep digital records for VAT purposes and submit their VAT return to HMRC through MTD compatible software.
• Businesses and landlords will need to submit their VAT returns using compatible software, which will pull information from the digital records.
• Exemptions from MTD for VAT will apply to a number of businesses and landlords. These include businesses that are unable to use electronic communications because or religious beliefs; insolvent businesses; and businesses that are unable to submit returns electronically because of disability, age or remoteness of their location.
• Businesses and landlords must use software that can connect to HMRC systems via an Application Programming Interface (API) in order to comply fully with MTD
• HMRC has previously consulted on the penalties regime for MTD. The system is likely to be a points-based model with taxpayers receiving a point every time they fail to submit on time. The model is likely to be introduced for VAT in 2020 once taxpayers in the April 2019 intake have become familiar with the system.
• Check our blogs and articles for regular updates
• Make sure you are using MTD ready software
• Set up bank feeds so your bank transactions are instantly available for you to reconcile
• Use an app to scan in your bills and receipts (Rodliffe can advise on the best one to suit you)
• Keep your books up to date (monthly would be our recommendation)
For more details, please read this article – https://www.rodliffeaccounting.com/blog/hmrc/04-2018/mtd-for-business
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