04 Feb Are your VAT records ready for the big changes of Making Tax Digital?
Is your business ready for Making Tax Digital? one of the biggest changes to the UK’s tax system? If you run a VAT-registered business with a taxable turnover of more than £85,000, you will have to keep digital VAT records from April 1 and send returns on compatible software.
The HMRC scheme is called Making Tax Digital (MTD), and it began with a pilot which started in April 2018.
The scheme means VAT-registered businesses and their agents, including outsourced bookkeepers and accountants, must ensure they are keeping records and filing returns online.
So, if you haven’t done anything about this yet, it’s time for an urgent discussion with your bookkeeper to ensure you’re ready for it.
What do I need to think about?
Your software– It must be compatible with the MTD system. Digital records can be held in a range of software, such as cloud-based products or spreadsheets, but compatible bridging software must then be used to send spreadsheets for your returns. You have until March 31, 2020 to make sure there are compatible links between the software products you use. Before that, you will be able to cut and paste information. Ask your bookkeeper which software they use and check it against the HMRC list.
Your records– Have you switched to an online record-keeping platform yet? It’s worth investigating that if you haven’t and looking into the training you will need to use it, and whether you need to transfer any records now.
Whether your business has complex requirements– Some businesses such as not for profit organisations not set up as a company, trusts, traders based overseas, and public sector entities will have an extra six months to join. So, their deadline is October 1, 2019.
How much time you have to deal with your VAT– If you’re doing this yourself, it’s probably gnawing away at the time you have to deal with your clients, market your business, plan for the future, and create a business strategy. Maybe it’s time to hand the VAT records and returns over to an outsourced bookkeeper who already has the right software and experience in dealing with HMRC for clients.
What should your digital VAT records include?
Your online records should have the time of supply (the tax point) for every supply, the net value of it excluding VAT, and the rate of VAT charged.
Your records should also have information about your business including the name, principal business address, VAT registration number and details of any VAT accounting schemes you use.
Why choose Balanced Up Bookkeeping for your VAT records and returns?
- We are experienced at using online systems for VAT and have a client base of more 250 happy customers
- We use compatible and HMRC-approved accounting software
- We offer you monthly bookkeeping to keep on top of your VAT records and ensure submissions are never late
- We keep you in the loop at every stage, ensuring excellent communication
Do you need advice on VAT records and returns for your business? Call us on 01633 439 002 or contact us here.