As of April 2019, the government’s plan of Making Tax Digital will come into effect but will only affect a certain variety of businesses. As of it’s launch, MTD will only apply to VAT registered traders or, more specifically, it will only apply to companies who have a turnover above the VAT threshold. Smaller businesses with not, by law, be expected to use the system, although they are given the option to voluntarily use it.
Live pilot studies have been carried out thus far, with small-scale, private testing already being tested out, meaning that the first businesses have already begun to keep digital records and provide updates to HMRC. This has helped to test, structure and developed MTD services for NICs and income tax. Following the success of these small-scale pilots, a wider and more expansive pilot began in Spring of 2018. This larger pilot allows for a full year of system testing before it is made compulsory in 2019. So, from April 2019, when businesses above the VAT threshold will have to keep their records digital and provide quarterly updates to HMRC, the system will have been fully tested and operational.
We will provide more information as it becomes available, including information on the best system software to use and links to the relevant HMRC digital systems.
If yourself or your company is already registered for VAT and have an annual turnover of £85,000 or above and you have not yet investigated the implications of Making Tax Digital, don’t hesitate to call us and one of our team will be happy to explain your options to you, as well as help you implement them.