Are you registered for VAT?
If so you are among the first businesses that will be affected by HMRC's new Making Tax Digital Legislation.
As of 1 April 2019, digital record keeping will be mandatory for VAT. Currently all VAT returns must be submitted electronically but the transactions can be recorded in any form including on paper. The new requirements should not be underestimated as they mean all transactions will have to be recorded digitally.
Businesses will have to use 'compatible software' so that it can connect to HMRC systems.
This software must be capable of:
- Keeping records in a digital form.
- Creating a VAT Return from the digital records held and submitting this to HMRC digitally.
- Providing HMRC with VAT data on a voluntary basis.
If, as a lot of owner managed businesses do, you currently use spreadsheets or paper for your VAT records, it is likely that you will need to combine these spreadsheets with, or move to, another software product to comply with the new requirements. The timing of this change to coincide with your financial year end and VAT quarters can make the process far more seamless to ensure that you are ready for 1 April this year.
Please contact Mike Waterfield if you would like to discuss this further on 0116 2423400 or email firstname.lastname@example.org