Recent news around the Making Tax Digital timetable has been met with relief from the UK business sector. The Government has taken on-board concerns from across the sector to revise its original plans around MTD. But what does the new timetable mean for UK businesses?
Making Tax Digital Delayed Until 2020 Excluding VAT
In simple terms, the revised timetable outlined by the Government will see digital tax returns delayed until 2020 for any taxes other than VAT. This means that only organisations with a turnover above £85,000 VAT will have to keep records for VAT from 2019. All other businesses and types of tax will not have to make this switch and provide quarterly updates until 2020.
Why Has The Timetable Changed?
Naturally, this latest news is somewhat different to what businesses had been working to. While the UK Government still sees the MTD initiative as vital for modernising the tax system, it has also accepted the need to make the transition a little less rushed. This is great news for the 3 million smallest UK businesses who will have the option to move onto digital tax returns when they feel able to and no sooner than the new 2020 deadline.
What Do You Need To Do To Prepare?
Of course, every business will need to go digital with their tax eventually, even if some can now wait until 2020. With this in mind, it is worth thinking about the steps you can take to get ready. To prepare, installing accounting software would be a good first step. Just make sure to use MTD compatible software like Xero, so any information can be sent in an acceptable format to HMRC. Software like this will allow you to upload data to it and then have it ready to send to HMRC or your accountant when needed.
Once this is sorted out, you need to make sure that the tax information for the relevant tax year is digitally stored on this software. If you have not started uploading your tax records digitally yet, we recommend you start as soon as possible. Although a lot of businesses have until 2020 to officially begin storing records online, it is still vital to plan in enough time to get your digital records in order for when you need them.
Let David Howard Help Get You MTD Ready
If you need a little help with getting ready for MTD or more information on what it involves, get in touch today. Our expert team can offer more information on what MTD means for your business and guide you through your preparations.