What is Making Tax Digital?
Making Tax Digital for Business is a key part of the government’s plans, with MTD coming into effect in April 2019. This means submitting manually is no longer an option – meaning the end of the annual tax return for millions. From April next year onwards, the ability to file VAT returns using the HMRC official website will be blocked and instead version 24 of Sage 50 will be the only software in use to comply with the new HRMC requirements.
How will this affect my business?
This will benefit your business in many ways. Recording and submitting VAT through accounting software like Sage, as opposed to relying on the traditional paper ledger practices, will reduce costs for businesses. Recent research has shown that small and medium sized organisations can save up to £17,000 per annum by using digital accounting software.
Why is this happening?
HMRC estimates that it currently loses around £9 billion a year through avoidable taxation errors. Through MTD, record keeping and automated VAT submissions, the scheme aims to close this tax gap, while also improving the efficiency and effectiveness of the submission process.
Why should I upgrade now if I’ve got until April next year?
Upgrading now isn’t necessary, but doing it early will give you and your business a head start, knowing that you are already compliant for when MTD comes into effect. Additionally, you will have to upgrade before April 2019 or you won’t be able to file your VAT returns in 2019 anyway.
At Matrix, we act as your ‘outsourced IT department’, providing help to businesses in Portsmouth, Fareham, Southampton and across the Hampshire region. To find out how MTD will affect your business, please contact a member of our team on 01329 888444. Alternatively, Click here to email us or complete the consultation form on our new website: https://mtxit.com.