Making Tax Digital
Making Tax Digital is here, are you compliant?
Rosemary Bookkeeping can help!
0345 862 0072
Making Tax Digital (MTD) is legislation from HMRC that currently affects how VAT-registered businesses do their VAT accounting.
When it was introduced in April 2019, only businesses above the VAT threshold (currently £85,000) had to comply.
But as of April 2022, all VAT-registered businesses will adhere to it.
Here are the dates:-
If your VAT period has a 31 March 2022 end date, your first VAT quarter under MTD for VAT starts 1 April 2022.
If your VAT period has a 30 April 2022 end date, your first VAT quarter under MTD for VAT starts 1 May 2022.
If your VAT period has a 31 May 2022 end date, your first VAT quarter under MTD for VAT starts 1 June 2022.
What is Making Tax Digital?
At Budget 2015, the government set out its vision for a transformed tax system, and in December 2015 it published the Making Tax Digital roadmap. This set out the government’s plans to make fundamental changes to the tax system – transforming tax administration by 2020 so it is more effective, more efficient, and simpler for taxpayers.
What does this actually mean?
From April 2019, VAT registered businesses (including self-employed and landlords) with a turnover above the VAT registration threshold (currently £85,000) had to:
- keep their VAT records digitally
- provide their VAT return information to HMRC through Making Tax Digital compatible software
For other businesses the implementation date was delayed until now.
Rosemary Bookkeeping work with a variety of MTD compatible software providers, so we can find just the right solution for your company to help you be compliant.
What are the advantages of going digital?
Digital accounting software has significant advantages over the traditional ways of bookkeeping.
And not let’s forget that as a VAT registered company you do actually need to be MTD compliant.
Imagine if you could:
- See a clear picture of your current financial position, in real-time;
- Have your accounts 100% online, so there’s no software to install and everything is backed up automatically. Updates are free and instantly available;
- Avoid upfront accounting software costs – upgrades, maintenance, system administration costs and server failures are no longer an issue;
- Have your bank feed your data directly into your accounts on a DAILY basis;
- Take a photo on your phone of a purchase invoice and it was posted automatically; AND
- See your results, who owes you money, who you owe to and your business bank balance 24/7, 365 from your phone.
What software can I use?
Most main stream accounting packages will be Making Tax Digital compliant, Rosemary Bookkeeping work with most of them, if you already use a compliant accounting package we can work with you to get your records ready and up to date or we can help you decide on which is the right package for your business. See our Software page for more detail about the accounting packages we work with on a regular basis.
Using a professional bookkeeper even if you have MTD complaint software means:
- The bookkeeping is done more efficiently
- The bookkeeping is done quicker
- The right codes are used in the right place
- Well trained humans can sport errors more effectively
- You get reports when you need them
- You get support