Making Tax Digital – Start Planning Now
From 1 April 2019, new legislation from HMRC called Making Tax Digital (MTD) will require all VAT-registered business above the VAT threshold (currently £85,000) to submit their VAT returns through commercial software and keep their records digitally.
Making Tax Digital is a new initiative to help businesses simplify their tax submissions by using accounting software that can connect to HMRC’s systems for the purpose of filing a VAT return. Making tax digital will provide a modern, digital service to help businesses get their tax right, reduce mistakes and avoid expensive compliance involvement.
The Government’s aim for MTD is to make the process of submitting VAT information simpler and easier for individuals and businesses.
When is my first Making Tax Digital VAT return due?
You will need to ensure that your business is MTD compliant from the first day of your first VAT period that start on or after 1 April 2019.
- If your VAT period ends on 31st March 2019, your first MTD VAT quarter will start on 1st April 2019.
- If your VAT period ends on 30th April 2019, your first MTD VAT quarter will start on 1st May 2019.
- If your VAT period ends on 31st May 2019, your first MTD VAT quarter will start on 1st June 2019.
Sage have put together a simple interactive tool to help you to work out when your first MTD VAT submission should be made.
How do I register my business for Making Tax Digital?
It is essential that your business has registered for Making Tax Digital for VAT with HMRC in time for your VAT return deadline. Your business will not be enrolled automatically even though MTD for VAT is now mandatory, even if you have previously used the VAT portal website to file your VAT returns.
To register for MTD you will need to log in with the Government Gateway account for your business. You might have used this login previously when filing VAT returns via the portal website.
If you don’t already have an account, you will be invited to create one, and will need an email address to do so. Once this process has been completed (which should only take a few minutes) you will be emailed a Government Gateway ID which will consist of a series of numbers.
To register for MTD with HMRC, you will need to input the following information when requested upon visiting the registration website:
- Your Government Gateway ID and password
- Your company’s VAT number
- The date your business became VAT registered
- The postcode of the principle place of business
- The Box 5 amount from your most recent VAT return
- The month in which your most recent VAT return was submitted.
Please note that verification from HMRC, that your business can start submitting VAT returns via MTD for VAT might take up to 72 hours, and you should not submit your VAT return until you receive this confirmation. This delay could result in you submitting a late VAT return, so register sooner rather than later.
What are my options?
Sage have worked closely with the government on this new legislation and are one of the forefront partners in this new initiative, they have put together this helpful blog about everything you need to know about Making Tax Digital.
For current Sage customers there are two options:
- Upgrade to the latest version of Sage
- Purchase an additional module
To find out more download the Sage brochure on Making Tax Digital.
What’s best for my business?
Wherever possible Micross Logic would recommend an upgrade path to the latest version of Sage, due to the additional features available in the latest version over older versions of the software. However, we appreciate this this will not be possible for all customers due to hardware and/or integration requirements or time requirements for project planning.
Whichever option you decide to choose, Micross Logic are here to help and guide you through this new change.
How will Making Tax Digital benefit my business?
Accurate record keeping
Plan and manage your budget more effectively
Access to a single plan to view tax information