What is Making Tax Digital (MTD)?
Making Tax Digital (MTD) for VAT is an HMRC initiative designed to make it easier for companies to submit their VAT in an accurate and timely manner.
From the 1st of April 2019 every VAT registered business above the threshold of £85k will have to send in VAT returns to the government through a ‘recognised’ accounting software package. In January 2019 our Maxton Cloud, under our company Business Micro System Ltd, received the HMRC ‘recognition’ for our product.
What is the benefit of MTD?
This move to digital record keeping is to try and improve efficiency and accuracy of timely VAT submissions. The government hopes to reduce administrative costs for HRMC, but it also helps to reduce the number of late penalty fee’s businesses receive. Business also benefit from increased visibility of their accounts improving business decision making.
Why is there MTD?
MTD for VAT is one part of the government’s plans to overhaul our TAX system and their aspiration to is to be the most digitally advised TAX administration in the world. Along with VAT submissions the government will be moving income and corporation tax to digital submission in the next few years.
What happens if I just use spreadsheets to keep business records?
You will still need an MTD-compatible software to submit your VAT return. Using Maxton Cloud and our MTD Excel Bridge you can link your current excel workbook VAT totals for submission to HMRC.
What if I am still using paper records?
The government has allowed a 12-month soft lunch period for those that are currently using paper record. Using Maxton Cloud, you can calculate your VAT totals in the normal way and upload them to Maxton Cloud for submission to HMRC.