There’s been a lot of debate and discussion on the topic of Making Tax Digital (MTD), but HMRC has now confirmed that MTD for business will become mandatory, beginning with MTD for VAT from 1 April 2019.
Who is affected on 1 April 2019 by Making Tax Digital?
All UK businesses that are VAT registered and have a taxable turnover above the £85,000 VAT threshold will be required to keep their records digitally and submit VAT returns to HMRC using MTD-compatible software. Other areas of MTD, such as Income tax and Corporation tax, have been put on hold until 2020 at the earliest.
If your turnover is below £85,000, registration to MTD is voluntary but once registered with MTD, you cannot de-register.
This will affect your first whole VAT period that finishes after 1 April 2019, so the first VAT return due under MTD will be for the quarterly period ending June 2019.
Why Making Tax Digital?
HMRC believe that a digital future will help businesses and individuals ‘get it right first time’, reducing tax lost through errors. Accounting software can help to integrate tax into business processes and financial planning, with better understanding for the user.
How is Making Tax Digital changing in the VAT return itself?
Not a lot. VAT returns are compiled by pulling data from digital records. HMRC will receive the same 9 boxes that would make up a normal VAT return. VAT return frequencies, payments deadlines and eligibility for the flat rate scheme will not change.
Does Making Tax Digital affect you?
The great news is there is nothing you need to do if you are already using FreeAgent. The team at FreeAgent have been busy building their MTD functionality and are working closely with HMRC to have it ready in time for 1 April 2019. Once the functionality is ready, Integro will work with FreeAgent and HMRC to ensure we’re well-equipped to support you with your MTD compliance.
FreeAgent have produced a handy guide to MTD here.
If you would like any further advice on this, please do get in touch.
Why Integro Accounting?
Integro Accounting is the UK’s only specialist provider of fixed fee, limited company accountancy services for contractors, consultants and freelancers that was established to an award winning standard – our Practice Manager, Maria Hickmott FCCA, won The British Accountancy Awards’ ‘Accountant of the Year’ in 2011.
We were set up with the vision of providing a service that is the ultimate for the dynamic, busy professional of today in a language you understand.
Integro Accounting have designed a bespoke service for the contractor who is always on the go; never forgetting that one size will never fit all.
The relationship you have with your accountant is the most important factor in our service which is why we will always offer unlimited contact with your own personal accountant; whether that contact is via the phone, email or face to face.
We have our 3 offices located in London, the South-West and on the Bedfordshire and Buckinghamshire border. There are also meeting locations in many of the major cities and towns across the Home counties, South-West and South Wales, all conveniently placed so that you never have to travel far to meet your accountant.
If you have any questions about contracting or would like to find out more about how Integro Accounting can help you and business please call Christian on 01525 303984, email firstname.lastname@example.org or request a callback.