Making Tax Digital has not gone away – actions required now
Accountants have just one year to prepare for MTD.
Last year MTD was being delayed. But from 1 April 2019 businesses with a turnover above the VAT threshold (currently £85,000) will have to:
keep their records digitally (for VAT purposes only)
provide their VAT return information to HMRC through Making Tax Digital (MTD) functional compatible software.
Practices can prepare now by:
Analysing their client base: Utilise this time early in the tax year to analyse your client list and see who is affected by MTD and summarise it for a dedicated team member to take action on.
Software testing: Speak to your current software provider to check if they are ready for it. Conduct market research of their competitors for costing and simplicity purposes. Also consider that:
HMRC has confirmed that it will not be providing any software
Excel spreadsheets can be used to keep digital records so long as these are able to meet all MTDfB requirements
HMRC will shortly issue an approved suppliers list on its website.
Knowledge: Ensure your employees understand what MTD means for the practice and its clients and check how well prepared your systems and processes are. If you foresee any problems, resolve these with your IT providers in good time.
Communicate with clients: Keep your clients informed about the changes and be ready to answer any questions they have.