If you are a tax paying citizen of the United Kingdom, then you might have surely heard about Making Tax Digital (MTD). The latter is considered as one of the most revolutionary moves by the HMRC department to digitalise the UK tax system. So, here’s an insight on Making Tax Digital and how it is going to help you.
What is Making Tax Digital?
An initiative by the HMRC department, Making Tax Digital is designed to ensure that the UK tax system is made advanced, efficient and easier for the valued tax paying citizens of the nation.
If you are a landlord or a registered business with a taxable turnover above the VAT registration threshold of £85,000, then you need to maintain your VAT records digitally and file your VAT returns using MTD compatible software.
To facilitate the tax payers, the HMRC department is working closely with the software providers to help them to bring a wide range of MTD products to market. Moreover, they have also announced a list of MTD compatible software on their official website if you are not sure what to use.
Will MTD Affect You or Not?
For all the VAT registered businesses and organisations across the UK with the turnover above the VAT threshold of £85K, MTD is compulsory from April 2019.
Whether you are an unincorporated business, a partnership firm, a company, an LLP, or a non-UK business registered for UK VAT and charities; you all fall under the criteria defined by the HMRC. If you are not sure whether your business falls under MTD or not, then contact Making Tax Digital Experts in London at Affinity Outsourcing.
For all other businesses and individuals across the UK, MTD will affect tax submission from April 2020; hence, you have enough to prepare yourself and your business for MTD.
When to Sign-up?
If you (or your client) are not paying by Direct Debit, then it is mandatory for you to sign up at least 72 hours before your return is due.
However, if you are paying the VAT by Direct Debit, then you need to sign up at least 7 working days before or 5 working days after your return is due.
Make sure your last Direct Debit has come out of your bank account before signing up.
What are the Penalties?
For sure, the HMRC department has proposed penalties for late submissions and payments under Making Tax Digital, but the details are yet to be finalised. But, late filing will attract a penalty, and it will be based on how late the filing is done and how many filings have been submitted late. Probably, after 4 late submissions, a penalty will be charged for each late submission.
Need Help to Understand and Adopt Making Tax Digital?
If you are an accounting firm (one-man firm or multiple partner company) in the UK, and need help with MTD and filing VAT on behalf of your clients, then Affinity Outsourcing is here to help.
If you are maintaining accounting records of your clients offline, on spreadsheets, or other non MTD compliant software, then you have to act as soon as possible. If you are highly occupied in other business activities or don’t have skilled resources, then contact MTD experts in London for immediate help and support. Dial 0203-848-4450 or email us your requirements at email@example.com, and we will get back to you with appropriate solutions.