Credit Control Services in Hertfirdshire

VAT (Making Tax Digital)

You may have overheard one or both of these terms and not known what the hell was being talked about, or you may not have heard of either of them.

Basically MTD stands for Making Tax Digital, the process of the HMRC (also known as the tax man) getting businesses to processing their accounts, and in return their tax returns, in a digital format.

You know how now, a VAT registered business (or their accountant) logs into HMRC website , fills in the figures that they have from their accounting software (or their spreadsheet!) , and it tells you how much VAT you have to pay? Well from April 2019, all VAT registered businesses that are over the VAT threshold (£85,000 for the current and next tax year at time of writing) , will no longer be able to log in and do this. They will have to use software to submit it. Most cloud accounting software is currently in the process of getting ready for this, and some (including Quickbooks UK) are already part of this trial. When the figures are produced as part of your VAT report on Quickbooks, at a touch of a button you can submit them to HMRC.

Obviously this could cause concern that businesses may decide to do this themselves and submit information that is wrong, which is why I would always suggest consulting with a qualified professional for VAT matters.

If you are reading this and want to get started with cloud accounting to make your life easier with this change, contact us now.

For more on this, see our second VAT blog here