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If you are a VAT registered business in the United Kingdom earning more than £85K, then you have to be Making Tax Digital compliant. This means that businesses over the VAT threshold now have to keep digital records of their tax and submit VAT returns via compatible software. The HMRC’s sole objective is to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.
Some Important Points to Remember Regarding Making Tax Digital:
If you are a small business earning over the VAT threshold, then here are some important points to remember, and they are:
- Making Tax Digital is all businesses and landlords earning over the VAT threshold
- Making Tax Digital is compulsory
- You need to maintain all your financial and tax affairs digitally, using MTD compatible software
- You have to submit all your records to HMRC on a quarterly basis
- Making Tax Digital is time effective and saves you from unnecessary stress
- You will get a full report of all your tax information, entitlements, and liabilities, so you know exactly how much you owe at any point in time
As per the data available over the web, it can be easily concluded that hundreds of SMEs in the United Kingdom are still underprepared for Making Tax Digital, and they require more support from professionals who have a better understanding of MTD in order to become tax compliant. If your business falls in the same categories and if you still don’t have an idea about how to make your business MTC compliant, then here are tips by MTD experts in London:
Getting Your Small and Medium-Sized Business Ready for Making Tax Digital
Originally announced in 2015, Making Tax Digital (MTD) is an initiative by the UK Government and HMRC to make it easier and faster for businesses and individuals to record, understand, and file their taxes digitally. This section lists the steps on what you need to do next to make your business Making Tax Digital ready.
Keep Records for Making Tax Digital
HMRC has stated that a business can use spreadsheets in certain circumstances, but the spreadsheets that you use must be MTD compatible. HMRC will provide free software to businesses with straightforward tax affairs, but businesses need to maintain the records by themselves. The uploaded records will be then transferred to HMRC by bridging software.
Getting Ready for Making Tax Digital
There are 2 most important aspects that you need to consider to make your business MTD ready, and they are:
- Ensure you’re using software or apps that can integrate with HMRC’s Making Tax Digital system.
- Talk to your accountant about how they can help you prepare for Making Tax Digital.
What You Need to Do?
- You need to keep a record of all your tax affairs digitally using an MTD compatible software
- Submit tax data to HMRC quarterly using digital tools.
- Offer a complete end-of-year position to HMRC using digital tools.
- Work with your accountant to make sure everything is recorded and reported correctly
How Affinity Associates Can Help?
Affinity Associates is a reputable accounting firm in London that has a team of MTD experts to help businesses overcome the mix-up that they are facing because of Making Tax Digital. We are all prepared to provide a fully integrated solution for MTD. To learn more about how Affinity Associates can help you in making your business Making Tax Digital ready, please contact us for a free consultation at https://www.affinityassociates.com or give us a call at +44-20-8903-2077.