Making Tax Digital
If you need help with making your business MTD-compliant, talk to One Click Accountant today. Making Tax Digital is a high-profile initiative centred upon digitalising the UK’s tax system. Making Tax Digital (MTD) began in April 2019 for VAT-registered businesses with a turnover of £85,000 or more were instructed to use compliant software to maintain their VAT records and submit information to HMRC digitally. Once a business has entered into the scheme, it cannot come out of it.
If you have not been told to commit to MTD for VAT, you can still register voluntarily. Company owners are being advised to prepare for Making Tax Digital by bringing online accounting into their business. HMRC says businesses that have been included in MTD so far must use ‘functional compatible software’ for their accounting duties. Although companies can use more than one piece of software to keep records, these must be “digitally linked”. They also need to communicate with HMRC’s systems through an Application Programming Interface or API.
Essential software functions
Your software must enable you to keep and preserve records in a digital form. It must be capable of creating VAT returns and providing HMRC with the information that it needs. It also needs to receive information from HMRC through the API platform. Businesses need to submit records to HMRC every quarter using compatible software. You must preserve your digital records for six years.
MTD support from One Click Accountant
Our team at One Click Accountant can provide the assistance you need whether HMRC has already made your business part of Making Tax Digital or not. Even if you are not currently affected by MTD, this will be the case in the future, so it’s best to act now. We are working with a wide range of businesses to prepare them for MTD reforms. The purpose of the Government’s initiative is to simplify the tax and accountancy process and enable you to keep track of how much you owe to HMRC as well as how much you are set to retrieve.
Greater accuracy and reduced error
Digitising your tax affairs enables you to make your accounts more accurate and amend errors within moments. One of the purposes of the scheme is to remove the margin for human error from the whole process. HMRC also hopes MTD will help businesses and individuals to gain a clearer understanding of their tax obligations. You will also be able to communicate with HMRC online once you digitise your tax affairs. Anyone who has ever spent a great deal of time on hold to the department will appreciate the value of this.
Talk to us today
It’s expected that MTD will be rolled out to businesses under the VAT threshold by 2021. At One Click Accountant, we can provide all the help and advice you need on managing your tax records digitally. HMRC is not releasing its own software to help you make your reports, so you will need access to other MTD-compliant software. If you would like to know more about Making Tax Digital, do not hesitate to get in touch with our team. We can provide you with access to this. Contact us today to find out more about Making Tax Digital with One Click Accountant.