HMRC are integrating a new tax system for the UK as of April 2019, this new system is said to be efficient, effective and most importantly easier.
Any business that is VAT registered and with a threshold of £85k per year will have to keep all files digitally. They will also have to submit tax returns via compatible accounting software, Xero & Quickbooks are examples.
Not all new tax schemes will be implemented in April 2019, income tax and corporation tax has been halted until at least April 2020.
Please see an attached link of the MTD timeline – https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/751170/Making_Tax_Digital_timeline.pdf
What you need to know
So the new initiative is designed to be one of the “most digitally advanced tax administrations” according to HMRC. A mission to make the whole process simpler, cutting down the work load into four quarterly installments submitted by the your compatible accountancy software.
Sole traders and business alike will now have there own personal tax account making tax calculation easier to read. Digital records will show HMRC and yourself how much tax is owed in per quarter, this thorough process will help avoid any unwanted errors when submitting payments. The personal tax account also makes submissions easier to file, ability to escape from any tax traps that pop up and help businesses budget for an end of year tax bill.
MTD will be compulsory for businesses with a taxable turnover of £85,000 VAT threshold. If you make that much then with little over two months left i’d suggest you make hast of getting all your files digitally uploaded ready for April. If you’re a business that makes less than the £85,000 VAT threshold then you have a little more time until April 2020 which is when the full process is implemented including income and corporation tax. Some business will be exempt from all of the systems, these will be businesses that cannot make returns due to religion, disability, age, remoteness of location.
how will the change affect me
In the main the only things that are affecting you with the new scheme is the change to 100% digital uploads, all VAT files as well as all VAT quarterly submissions, the end of year bill and the use of software for all VAT returns.
If you are unsure and would like some further hands on advice, feel free to call the offices on 0207 993 8661, email us at email@example.com or alternatively come down and visit the offices in Farringdon London.