Starting from 1 April 2019, businesses with a turnover above the VAT registration threshold (currently £85,000) will be required to keep digital records for VAT purposes and submit VAT returns to HMRC using “Making Tax Digital” compatible software.
It’s likely that in the future making digital returns and keeping digital records will also be made compulsory for taxes other than VAT.
What isn’t clear at the moment is which software packages are seen as compatible by HMRC. At this time we understand there will be no free software for Making Tax Digital for VAT. The latest information says that HMRC is working closely with software providers to ensure a range of suitable products will be available.
Alarmingly, with just six months to go before the planned introduction, a high proportion of UK businesses have little or no awareness of HM Revenue and Customs’ flagship Making Tax Digital project.
Mike Spicer, Director of Economics and Research at the British Chambers of Commerce (BCC), said: “The government’s aim to modernise the UK’s tax system is admirable, but in view of low business awareness and the impending challenges of Brexit, it would make sense for HMRC to delay the implementation of Making Tax Digital in order to get this change right.
“We are concerned that far too many firms still aren’t clear on what Making Tax Digital is, or what it means for their operations. With just months to go before the deadline, all affected businesses should start to prepare themselves for the inevitable changes by ensuring that their accounting software is HMRC compatible. If they are in any doubt they should speak to their software provider and/or their accountant.”
James Pendlebury, Director of Livesey and Spottiswood, added: “Our website will include updates as and when we receive them from HMRC and additional information can be found at http://tinyurl.com/y6w8hqo2”
The Chamber will be hosting a brief seminar about Making Tax Digital, 9am – 10am on 27th September, presented by Mitchell Charlesworth. The seminar is free for Chamber Members and just £10+vat for Non-members.
To book visit www.sthelenschamber.com/events or call 01744 742028.
