Making Tax Digital (MTD) is a term you have most likely come across before, and it’s a term you will be hearing a lot more of as the deadline approaches and the Government ramps-up promotion.
In a nutshell, Making Tax Digital (MTD) is, as its name implies, a digitised tax system that will completely change the way tax records are kept and how information is sent to and received from HM Revenue & Customs (HMRC). MTD will be gradually phased in from 1st April 2019, starting with VAT and eventually being rolled out for all other taxes.
MTD will affect all businesses eventually, so the most important question you should be asking yourself right now is;
How can I prepare for Making Tax Digital?
- Start using cloud accounting software. This is our top recommendation for getting MTD ready. The benefits of switching to modern accountancy software stretch far beyond just MTD. We can help with this.
- Look at your VAT adjustments – check whether they are correct and how they flow through to your VAT account, as this will now be visible to HMRC.
- Review your internal processes, systems and practices. Contact your software providers IT teams and ask what they can do to help you get MTD ready.
- Test your data. Check to see whether your VAT-related data is accurate, up to date and that you’re using the correct VAT codes.
- Set aside time for switching to MTD, consider the costs and potential disruption to your business.
These are our top 5 recommendations for getting MTD ready. If you need help with getting your business, then please get in touch.