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There's only a few weeks to go before VAT-registered companies need to file their returns online using HMRC-compatible software, but reports suggest some businesses are struggling with the new regulations.
Making Tax Digital (MTD) is part of a huge push to move the tax system online in an attempt to make it easier for companies to manage their business affairs. From April 2019, if your turnover is in excess of £85,000, your VAT return must be filed digitally via software compatible with HMRC's systems. Companies will no longer be able to enter figures manually into HMRC's portal.
It's important to note that VAT-registered businesses with a turnover above the £85,000 threshold must register for MTD with HMRC as this doesn't happen automatically after April 1. Some companies will have to pay for new software in order to accommodate cloud-based services, with some experts predicting a chaotic switchover to the new system.
Here at AMR, our expert staff have been hard at work making sure our systems and processes are compliant with the impending switch to MTD.
We've devised a MTD health check service where we assess your software and ensure it's MTD-ready. In some cases, upgrades or bridging software are all that's required to bring systems up to date with the new online platforms. Our MTD health check gives you all the information you need to make sure your company is ready to go this April.
Currently, it's not compulsory for VAT-registered companies below the £85,000 threshold to submit their returns digitally, but they can use the new system on a voluntary basis. It's expected that income and corporation tax returns will be brought under the rules during 2020.
While submitting your VAT return using spreadsheets and bridging software is still acceptable to HMRC, if you would like to change from manual to online accounting we can help. We usually recommend Sage or Xero as it's an intuitive, user-friendly system. At AMR, we're proud to be Silver Xero Champions. We can provide in-depth training and support as well as managing your Xero account if you'd like us to.
If you're unsure how MTD is likely to affect your business, or if you need some help with changing over from your manual records to software, do get in touch. Find out more with our helpful Making Tax Digital guide.