Preparation for “MAKING TAX DIGITAL”

In its drive to promote digitalisation HMRC has been working on a project called “Making Tax Digital” for the past few years with the original plan to require businesses with turnover in excess of £10,000 to submit quarterly accounts figures to HMRC so that HMRC could “help” them plan their tax and ensure that they did not “forget” to declare income.

To date this has been a non-starter, however, there is now a change of emphasis towards digitalisation of VAT returns.  As a result, “Making Tax Digital for VAT” is set to start in April 2019 with traders required to submit their figures from a digital platform.  In essence, this is online bookkeeping software which records each and every transaction through your business, collates the figures required by HMRC and transmits them via an application programming interface (API).  HMRC had originally mentioned the availability of free software but this hasn’t materialised.

HMRC have not made any attempt to communicate this directly to businesses as yet (many businesses do not work on a digital platform) and do not yet have a wide scale successful working pilot in place.  As Accountants, we have watched with increasing incredulity but despite the lack of a working system and potential Brexit issues in March 2019, they have announced to the Accountancy community that it will definitely be starting on 1 April 2019.

Thus, the questions turn to how will this affect you?

Non-VAT registered businesses

Assuming that your turnover in the current year does not reach the VAT threshold of £85,000, you are permitted to continue to work under the current system while your turnover is below the threshold.  However, if your business grows, you will have to change the way in which you issue invoices and submit VAT returns but putting your business on an online digital platform.

You do have the option of adopting this new way of working even if your turnover is below the threshold, but if you are happy with the way things work at present then no action is required for the time being.

VAT registered businesses

If your current method of bookkeeping is using excel or non-digital platform and filing your VAT return directly onto the HMRC website, I am afraid that this method of submission will be closed from 1 April 2019. You are going to have to move your record keeping onto a digital platform to enable the transactional detail needed and the ability to submit digitally.

At Stratford Accounting, we specialise in Quickbooks Online and offer digital bookkeeping assistance ranging from setting up and training to quarterly VAT returns. We also offer regular bookkeeping services on a regular basis depending on your needs. We work with small managed businesses and professionals as well as larger companies with a more regular bookkeeping support requirement.

Quickbooks Online can help you manage your accounts at your fingertips with real-time information. With HMRC digitising “Making Tax digital”, we can help you set up a digital account and be ready for the first digital launch for VAT in April 2019.

As Quickbooks Online pro adviser and we have partner’s licencing agreement which we can offer you a discounted wholesales subscription to help you get into an online platform.

For more information, please, call 01789 576028.

You may have seen Quickbooks Online advertisement on the TV.  Their website is – https://quickbooks.intuit.com/uk/accounting-software/ should you wish to have look.

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