Making Tax Digital
Ensure your business is compliant with the latest changes to VAT legislation.
What is Making Tax Digital?
Making Tax Digital (MTD) is a key HMRC initiative that is designed to make sure the UK tax system is more effective, more efficient and easier for taxpayers to get their tax right and keep on top of their affairs. HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world, and MTD will change the way the tax system works and transform tax administration for the better.
From 1 April 2019, if your business has a taxable turnover above the VAT threshold (currently £85 000) you will need to ensure that you have MTD-ready software such as Reckon One in place to keep records digitally and submit VAT returns to HMRC.
When does Making Tax Digital start?
MTD is mandatory for all VAT-registered businesses with a taxable turnover above the VAT threshold (currently £85 000) from 1 April 2019. It’s a good idea to start thinking about how you’ll make Making Tax Digital a part of your business process.
Other components of MTD, such as income tax and corporation tax, have been placed on hold until April 2020 at the earliest and further details will be confirmed by HMRC.
How will MTD impact my business?
MTD is really not as scary as it sounds. From 1 April 2019, if your business has a taxable turnover more than the £85 000 VAT threshold, all you (or your accountant) need to do is record your taxable records and submit your VAT returns through MTD-compatible software – like Reckon One.
The introduction of MTD brings a great opportunity for you to streamline your accounting process. Keeping records and filing tax digitally is a great step forward for your business, giving you the chance to regularly check income, expenses and profit.
Businesses below the VAT threshold can choose whether they adopt MTD or continue to use the HMRC online portal. This may be the perfect time to switch to Reckon One and be ready for any further changes to digital requirements from April 2020 onwards.
Reckon is supporting Making Tax Digital
Reckon has been working closely with HMRC and we are MTD ready ahead of the ‘go live’ date on 1 April 2019. We are proud to be on on their list of ‘software that’s compatible with MTD for VAT’.
Our Reckon One online accounting software has VAT functionality to ensure you are MTD compliant, with no extra cost involved. If you are currently using Reckon One, your business will comply with MTD for VAT record keeping requirements and you’ll see an option soon to start moving to MTD for VAT in Reckon One.
You can also read our Making Tax Digital update article below.
Get Making Tax Digital ready with Reckon One
We’ve added MTD functionality to Reckon One ahead of the mandatory 1 April 2019 date.