Making Tax Digital Compliant
Making Tax Digital (MTD) is a new reporting requirement which was introduced by HM Revenue and Customs (HMRC) with effect from April 2019. All VAT registered businesses need to prepare their accounting records on MTD compliant software and submit quarterly returns to HMRC. Penalties are levied by HMRC for late submissions.
One particularly effective piece of software is Xero. This has the benefit to businesses of having an automatic bank feed, meaning that the business' bank transactions can be imported directly into the software from its bank. This saves considerable administration time and enables business owners to have up to date business information at their fingertips. VAT returns can also be submitted directly to HMRC via the software.
From April 2024, all non-VAT registered businesses and private landlords will need to move onto the MTD system If you rent out a property, this will affect you. Working with a reputable accountant will provide you with a tax-effective software option and ensure you get your returns filed on time every quarter.
Sarah Goddard is Xero Adviser Certified and able to assist clients with making a smooth transition over to the new system, which will need to be successfully up and running well in advance of the commencement date to ensure that any teething problems are dealt with and all record keeping is up to date.