Finally upon us?

For the last few years HMRC have been hinting that there will soon be a tax reform dubbed "Making Tax Digital".  Quite what form this would take and what would be required of businesses and individuals was unknown until February 2018 with subsequent updates since.  The current "big push" to change over to MTD being this April (2022).

At present MTD (Making Tax Digital) has changed the VAT process for most VAT registered businesses, soon to encapsulate the remainder this April.

What does MTD actually mean / hope to achieve in the long run?

• Digital record keeping / software (paper records will no longer be "compliant")
• A live tax account.  All individuals and businesses will be able to see a live balance of their tax liabilities and communications with HMRC
• No more tax returns?  In the very long term HMRC have stipulated that quarterly digital submissions will replace the "end of year" tax return

Most of the above plans are "due" to be introduced April 2024.  But for now, MTD continues to only effect VAT registered businesses, being cemented this April 2022.

MTD marks possibly the largest reform to the tax system in history... although at this stage it is worth stating that a lot of this is "planned" but may change considerably when it finally comes to pass.

At the moment, the only confirmed requirements relate to VAT registered businesses;

• From April 2019 all VAT registered businesses above the VAT registration limit had to submit their VAT returns via software.  The HMRC "free" portal ceased to exist, as will the option of paper VAT returns
• From April 2022 all VAT registered businesses below the VAT registration limit will also have to submit their VAT returns via software

Essentially by April 2022 all VAT registered businesses will need to use bookkeeping software and all VAT returns will have to be submitted via software.

For our clients we will be offering two main lifelines to keep you compliant and hopefully removing any panic;

As a Sage Partner we can set you up on Sage at a reduced price, help train you and transition to using software if you are not already... that's it.  You will have all the benefits of using software and have ongoing help and support, as well as the ability to file your VAT returns straight from Sage.

For those that perhaps do not feel comfortable with software, or rather that we take the burden of bookkeeping and VAT returns away, we will offer inhouse bookkeeping and VAT return preparation as we have always done.  Behind the scenes we will be using software on your behalf, so that you see "no change" but are happy knowing everything is being taken care of and filed.

See details of how we work with our clients for bookkeeping below: