From April 1st 2019, VAT-registered businesses with a taxable turnover of £85,000+ must keep digital VAT records & use specific software.
Making Tax Digital
Making Tax Digital (MTD) is a government initiative that will change the way businesses maintain their tax records and the software they use to send tax returns.
From April 1st 2019, VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are required to keep digital records for VAT and send HMRC returns using software that is compatible with Making Tax Digital.
Some businesses have had their start dates deferred, but the vast majority will need to ensure they are ready for the April 1st 2019 deadline.
Are the deadline for sending returns changing?
No. The deadlines for sending VAT returns and making payments are not changing, including for monthly, quarterly and annual VAT return schemes, but businesses will have to keep digital records and send the returns to HMRC using MTD-compatible software for VAT accounting periods that start on or after April 1st 2019. This also applies to businesses that operate the Flat Rate Scheme for VAT.
The government has published a VAT Notice about Making Tax Digital which businesses and agents may find useful.
You can also find out more about which software products are already compatible for Making Tax Digital for VAT.
Find more information about Making Tax Digital
Visit the Making Tax Digital webpage on the government website, and read advice on getting ready for Making Tax Digital.
Find out more about Making Tax Digital for Income Tax
Only VAT is affected by the April 1st 2019 deadline, but Making Tax Digital will also factor in Income Tax in the future.
There is a pilot programme ongoing for Making Tax Digital for Income Tax that is available on a voluntary basis. It will not be mandatory for businesses until at least 2020.
Businesses can sign up if they’re a sole trader with income from one business and/or are landlords (except those with furnished holiday lettings).
Find more information about Making Tax Digital for Income Tax, including how to get involved in the pilot.
You can find out more about which software products are already compatible with Making Tax Digital for Income Tax.
Tax return deadline looming
Remember to file your tax return and pay any tax you owe by January 31st 2019. Late returns and/or payments can bring fines starting at £100.
HRMC has stated that a record 93% of people completed their tax return online last year.
You can watch films and webinars that offer advice on completing your tax return.
Help is also available on the Self Assessment section on GOV.UK or from the Self Assessment helpline on 0300 200 3310.
Tax return amendment consultation
The government is consulting on the issue of tax return amendments. The ‘call for evidence’ outlines the current position on amendments to tax returns, and asks a series of direct questions to gather evidence on the issues taxpayers face when making an amendment to a tax return.
Visit the consultation page here. The consultation closes at 11.45pm on February 6th 2019.
Webinars to support people on tax issues
- Advice for individual landlords around income from properties – December 12th, 11am-12.15pm
- Advice about recent changes to Stamp Duty Land Tax – December 12th, 2pm-3pm