8 FAQ’S on making tax digital
- Does my business need to sign up for MTD?
If your taxable turnover is over £85,000, then yes, you do. However, there are exemptions, for example if it’s part of a deferred group, so speak to your accountant if you’re not sure.
- What if I am VAT registered but my turnover is not above the VAT threshold?
If your business has a taxable turnover below the VAT threshold
you can still sign up for MTD voluntarily, there is no date at the moment for mandatory registration.
- When do I have to submit my first MTD return?
Your first quarter starting from or after April 2019 will be your first MTD return. So, if your quarters run Apr/May/June, you’ll need to submit by 7th August. May/June/July, by 7th September, and so on.
- How do I submit my returns?
You can submit your returns either via MTD approved software, or, if you are using Excel, via “Bridging Software”. HMRC are not providing any free software for MTD but they have published a list of all MTD Compatible software here: https://www.tax.service.gov.uk/making-tax-digital-software. Speak to your accountant if you need help deciding which route to take.
- Do I have to change how I keep my records from the 1st of April?
The requirement to keep digital records does not mean that you will have to scan and store invoices and receipts digitally. You can continue to keep documents in paper-form if you prefer. What is required, however, is that each individual transaction (not summaries) will need to be recorded and stored digitally.
- Which transactions do I have to record electronically?
All transactions of prime entry, for example sales and purchase invoices, and sales and purchase credit notes.
- What happens if I make a mistake?
HMRC has confirmed that there will be a ‘soft landing’ period between April 2019 and March 2020, in which there will be no financial penalties for record keeping failures.
- When will MTD for Income & Corporation Tax launch?
Although it is in the pipeline, the launch of MTD for Income & Corporation Tax has not yet been announced. The earliest dates for Corporation Tax will be 2020, and Income Tax will be slightly later in 2021.
Read more from this issue...
Tax year, 6 April – 5 April, why on earth?
What have the Romans ever done for us? Well, quite a lot, actually, with respect to our funny tax year. And it’s all to do with the switch from the Julian calendar (proposed by Julius Caesar in 46BC) to the Gregorian calendar in 1582.Continue reading…
Welcome to the 2nd edition of The Business Godparent
Welcome to the 2nd edition of The Business Godparent. A publication that aims to provide business owners with valuable updates, useful tips, guidance on technology, and friendly support.Continue reading…
Ann Brebner Time For You
Ann Brebner from Time For You
takes a seat on the Red Sofa.