Making Tax Digital is regarded as one of the largest changes to the administration of the tax system in the UK in recent years. However, with only 7 months to go until the introduction of Making Tax Digital for VAT implementation date of 1 April 2019, the British Chamber of Commerce reported that a large proportion of UK businesses have ‘little or no awareness’ about the switch to a digitised tax system.
Here are some key facts:
- The Making Tax Digital rules apply from your first VAT period starting on or after 1 April 2019.
- With effect from 1 April 2019, if your taxable turnover is above the VAT registration threshold (currently £85,000), your business must follow the Making Tax Digital rules set out by HMRC.
- Only businesses that have never exceeded the VAT registration threshold will be exempt from Making Tax Digital.
- You will be required to submit your to submit their VAT return using functional compatible software.
There are certain exemptions where businesses will not need to follow the Making Tax Digital rules, you will need to make direct contact with the HMRC and they will need to be satisfied that the exemption applies.
As a Sage 200cloud customer, if you are not already using to the most current version of Sage 200cloud, you will have two options available
- Upgrade to a compatible MTD version (2018 spring release or later)
- Purchase the MTD module which is compatible for older versions of Sage 200
Do not delay, if you have not yet discussed the options with one of our Sage consultants, please get in touch.
In July the HMRC published an update on Making Tax Digital