If your business is registered for VAT, then you can expect a letter from HMRC very soon.
Don’t worry, you’re not in trouble (it’s not a letter to fear) however, the information inside has enormous implications about the future of your business.
HMRC will be modernising the VAT system and this letter is to inform you that you need to get ready for it.
Below is a copy of this letter as well as all of the changes you need to be aware of.
The VAT System Is About To Change
This is a move that has been a long time coming for HMRC.
HMRC’s systems and processes have been due an upgrade for a long time now and Making Tax Digital is going to be their answer to improving the way they communicate with business owners and process their information.
The introduction of Making Tax Digital will digitise the way that business owners submit their returns. It’s a monumental step in the right direction for HMRC’s systems and processes.
However it’s going to have an impact on many business owners as they undertake this massive change.
Every business who is registered for VAT will need to record and submit their returns digitally, through approved software.
What’s In The Letter?
Below is a copy of the letter we personally received from HMRC for you to know what to expect.
The letter begins by explaining that HMRC will begin modernising the VAT system. The changes will affect businesses with an annual turnover above the VAT threshold of £85,000.
The changes will need to be implemented for accounting periods starting on or after 1st April 2019.
Here’s What Should You Do When You Receive Your Letter
The big requirement of Making Tax Digital are that you must keep a digital record for all of your VAT transactions.
You must also use compatible software, that is MTD approved, to submit your VAT returns to HMRC.
The next steps are to get in touch with your accountant, as soon as possible, to get signed up for Making Tax Digital or go to this link and sign up yourself.
Then you must check that your software is ready for Making Tax Digital, or purchase suitable software if you don’t use any yet.
If you’re interested in having DH Business Support get your business fully prepared for Making Tax Digital then fill out the form below.
We can quickly and easily put your business onto the Xero software. Xero has already been declared MTD ready by HMRC and get you ready for the deadline in April.
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