Making Tax Digital is just around the corner – is your accounts system ready?

Making Tax Digital (MTD) is an HMRC initiative designed to make sure the UK tax system is effective, efficient and easier for taxpayers.The roll out starts on 1 April 2019 with MTD for VAT. From that date, VAT-registered businesses above the threshold of £85,000 turnover will have to keep digital records and submit VAT returns using compatible software. The following Q&As should help you in what to do next.

Q: – Is my current software compatible?
A: – If you have a Cloud-based accounts package, you probably are or will be ready. We would advise you ask the question now. If you have a non-Cloud package you may well not be ready, depending on the version you are running.

Q: – I use excel or paper to prepare my VAT returns and key them into HMRC website, what do I need to do?
A: – From the 1st April you will no longer be able to key figure directly into HMRC website.

HMRC will accept some types of spreadsheet but they need to be linked and submitted via compliant software. We would recommend talking to us about moving your accounts system NOW to an online system so as you are ready for the deadline.

Q: – My software is compatible, but I key my VAT return details into HMRC website, can I continue this?
A: – No, however you should be able to set your accounts system up to submit the returns for you.

Q: – Do you have a list of accounts packages that are ready?
A: – The list is changing all the time as companies complete testing.

The major products that have confirmed are compliant or will be are:

Sage 50c Version 24 above (note the c versions of Sage)
Sage 200cloud spring 2018
Sage 200c 2011 to winter 2017 (you will need an additional module to make you compliant)
Xero
QuickBooks – Online versions
Sage Accounting (formerly Sage One)

HMRC has a full up to date list here

HMRC plan to roll out its next phase after April 2020, while this like target the self-employed and landlords.

If you would like any assistance with your software, please contact Keith Knight at Keith.Knight@wilsonhenry.co.uk

Making Tax Digital