How to get your business ready for the digital tax turnover

Thornhill Insurance / Economy  / How to get your business ready for the digital tax turnover

How to get your business ready for the digital tax turnover

For the VAT period commencing 2019, the way that many businesses record tax will be changing. These changes will be applicable for all businesses whose taxable VAT turnover exceeds the registration threshold, which currently stands at £85,000. For those with a turnover below this amount, you have the option to voluntarily sign up to Making Tax Digital (MTD)-compatible software.

Revenue & Customs (HMRC) believes that this new software will help make fundamental changes to the way self-employed individuals and businesses record their tax, making the overall experience more efficient and easier to get right first time.

What you need to do

If you are either required to take your tax digital or have volunteered to sign up to MTD, here are a few things you can do to prepare in advance.

Join the pilot

The MTD pilot has been available since April 2018 and is open to businesses and their agents to trial to get used to how it works in advance.

Find compatible software

Your MTD-compatible software will need to let you submit tax returns as well as keep a record of sales and purchases. You can find out which software is compatible here.

Prepare your existing software

For those with existing tax-record software, this needs to be compatible with MTD. It’s important to speak to your software provider now to find out when it will be updated for MTD.

Using spreadsheets

If you use spreadsheets to keep your business records, you will need MTD-compatible software in place to send and receive the tax information. You may require bridging software to make your spreadsheets compatible, so be sure to check this before the start of the next tax year.

Creating a digital link

Businesses do not have to keep all their tax information in one place or under the same software if the information can link digitally to HMRC. Don’t panic, though; the Government are focused on helping businesses transition in this period which means you will have some breathing space when it comes to creating these links. All businesses have until 31 March 2020 to ensure these digital links are present, and before that they will be able to cut and paste the information to transfer. There are exceptions to this rule and it’s advised you check with your agency or providers first. To find out more about MTC, what you need to do or whether you should sign up for it, click here for more information.

For those of you looking to review your existing insurance considering recent internal or external changes, or if you’re looking for a new policy altogether, get in touch with us at Thornhill Insurance on 01924 499182 and we can help get your business covered for a wide range of risks!

Post Tags: