Digital Record Keeping, Prepare For Making Tax Digital [MTD]
From April 2019, businesses with taxable turnover above the VAT registration threshold will be required to keep their records digitally and submit VAT returns using Making Tax Digital compatible software.
Businesses are already required to keep evidence of transactions such as copies of invoices, receipts and cash takings records as part of their existing record keeping obligations. As many agents tell us, if this is done manually, this paperwork can really build up and the impact on their workload can be huge when that paperwork arrives in the classic shoebox or carrier bag late in January!
TAx Agents are also probably used to seeing some clients make avoidable errors due to the fact that they keep poor records. Supporting their clients to make the transition to using software and apps to keep records digitally, as they go along, can do all of the hard work to help avoid these basic errors. Some of these tools allow the scanning of receipts or automatically add income and expenses from the business bank account. Many have nudges built in to help eliminate common mistakes. As the income tax and VAT pilot’s progress, we will publish details of MTD compatible software on GOV.UK