What is Making Tax Digital (MTD)?
MTD for VAT is new legislation that requires all VAT registered businesses with a taxable turnover, above the £85k threshold, to keep their records digitally and submit their VAT Returns using MTD compatible software, such as Xero. Businesses affected by MTD for VAT will no longer be able to use HMRC Online Services for their first VAT return with a start date after 1st April 2019.
For example, if your VAT Period starts on 1 April then you must keep digital records from that date and submit your next VAT Return using MTD compatible software. If your first VAT period starts on 1 May 2019, then you must start keeping digital records from that date and submit your next VAT Return using MTD compatible software.
I’m a business - where do I start?
You will need to sign up your business with HMRC using your existing Government Gateway Login and VAT Number as well as make sure that your current software is MTD ready. Once you have authorised your software eg. Xero to connect with HMRC, you’ll be able to submit MTD VAT Returns directly from your software account. HMRC has provided useful guidance on how you do this.
We are here to help!
At Link Bookkeeping we have earned the Xero ‘MTD ready’ badge. So if you need help getting started with MTD and submitting your digital tax return, we are here for you! We are also Xero migration certified which means that if you are using another software and would like to switch to Xero (maybe your current software is not MTD ready) we will be able to handle the migration for you. Just click here for contact details.
Some key benefits of using Xero online accounting:
Unlimited users for free and no upgrade fees for MTD functionality
No need to install any updates as this happens automatically behind the scenes with no interruption
Automatic bank feeds
Get paid faster with online invoicing and payments
Choose from more than 700 connected apps that meet your business needs
See a real-time view of your finances
View the same data as your accountant from anywhere at anytime
““A modern tax system, based on digital technology will make it easier for businesses to get their tax right. Reducing the amount of avoidable errors will also reduce the cost, uncertainty and worry that businesses face when HMRC is forced to intervene to put things right.” ”