Making Tax Digital - MTD
These are changes that have not been particularly well publicised by HMRC. But affects thousands of businesses right now.
For your VAT return period commencing after 1st April 2019 (please keep reading because you may need to make changes now) you will have to use a bookkeeping package to submit your VAT returns.
This deadline only affects businesses who are a) VAT registered and b) have a turnover in excess of the £85,000 VAT threshold. MTD will eventually affect all businesses though.
What do you need to do ?
If you operate your books on Excel (or manually) you need to invest in bookkeeping software. We are moving all our affected clients to our free bookkeeping software now. Don't assume all bookkeeping software is the same (it really isn't) and don't just opt for Sage (we haven't).
However you should ideally move at the beginning of your business year. If your year end is 31st August then start your new bookkeeping package from 1st September - it will make your year end much easier to manage rather than having part of the year on manual records and part on software.
You need to check that your software provider is MTD compliant (or will be by 1st April).
Bookkeeping is a daunting prospect if you have not attempted it before or it doesn't fit into your skillset. Don't be afraid to ask for help because unravelling a tangle later on could be costly and time consuming. Some clients do their own VAT returns (with a little training from us) - others ask us to complete them.
We are running pilots with HMRC so will be more informed than many about the changes ahead. MTD is the method by which HMRC collects transactional timely information about your business. It enables HMRC to better target those businesses who are not correctly processing their returns - good news for all those businesses who are doing their returns correctly!