Making Tax Digital is intended to bring the UK tax system into the 21st century by providing businesses with a modern, streamlined system to keep their tax records and provide information to HM Revenue & Customs (HMRC).
The first to be affected are small businesses and individuals with a turnover above the VAT threshold of £85,000, who are required to keep digital records for VAT purposes from April 2019.
Making Tax Digital is intended to help you better keep track of how much tax you owe – or how much you are due back – throughout the financial year.
- Accurate Tax Information: Replacing paper-based bookkeeping with digital tax accounts will let you check the information HMRC holds about you is 100% correct.
- Reduced Errors: Making Tax Digital’s new reporting function will allow HMRC will look at your tax information almost immediately, reducing human error from data input.
- Easier to understand: HMRC anticipates taxpayers will better understand how much tax is owed within the digital tax account – much like online banking.
- Easier contact with HMRC: Making Tax Digital will make it easier for you to contact HMRC online via webchats and secure messages.
We can work with you to prepare for Making Tax Digital*. As small business owners ourselves, we fully understand what is required to manage your business records digitally. At The Accounting Centre, we’ve spent a great deal of time training and developing the right support services to help small businesses through this period of change.
HMRC will not be offering software to help you report quarterly, so we will advise you about MTD-compliant software such as QuickBooks and Xero to help make managing your accounting records easy, wherever you are.