The drop in temperature is a sign that autumn is on the horizon, and that we're already half-way through the financial year. That means there's just six months to go before VAT-registered businesses with an annual turnover of £85k will be mandated to make tax digital.
Not all businesses will be required to keep their records digitally, and provide digital quarterly VAT updates to HMRC, but April 2019, when Making Tax Digital (MTD) lands, is another step forward for HMRC's ambition to become one of the most digitally advanced tax administrations in the world.
The initiative is set to deliver a modern tax system for modern businesses, and make it easier for individuals and businesses to keep on top of their financial affairs, and meet their VAT obligations.
We believe Making Tax Digital presents several benefits to businesses.
You won't be required to provide information that HMRC already has, or is able to obtain from another government department, bank or building society.
You can view the information HMRC holds on you and your business at any time, and ensure it's complete and correct. By 2020, your digital account will be as comprehensive as your online bank account, providing a single financial picture of liabilities and entitlements.
You'll no longer need to wait until the end of the year to know how much tax you should pay. Tax is calculated in real time, reducing the amount of tax due or repayments owed through error and eradicating penalties and interest charges.
The initiative currently only applies to businesses who exceed the VAT threshold, and smaller businesses are not required to use the system. If you would like to use it voluntarily, particularly if your projected growth may require you to make your tax digital next year, we can help you too.
At Kendall Richardson, we've chosen Xero cloud accounts software to link with HMRC's systems, and we're certified users of this HMRC-approved software.
The next few months are bound to be busy as we approach Christmas and all that entails. If you're looking for a New Year's resolution that you can keep, then making your tax digital should be it.
Don't miss the deadline: as we know looking back to April 2018, time flies when you're running a business.
Even better, make that resolution now - we're only a call away.