The concept of Making Tax Digital has transformed the way your business pay the taxes to the HMRC. The foremost changes that you will be able to see will come into limelight around April 2019. In this blog, we have curated the important factors on how Making Tax Digital will transform the era of your business and how does that mean directly to you.
Let’s commence in brief on knowing what exactly is meant by Making Tax Digital UK.
What is Making Tax Digital?
Making Tax Digital is the scheme that has been presented by the UK government. It has been done to make it easier for the businesses, regardless of their size, to help in the management of their taxes. The entire proceeding will come into existence from 1st April 2019. And this formulation is known to be Making Tax Digital for VAT.
From the date, you will be able to submit your VAT Returns in UK. That means the VAT certified businesses which forms to the companies who have a turnover the VAT threshold. That amounts to nearly £ 85,000. So, it is that you have to digital submit the tax records to the HMRC.
That means you no longer have to conduct HMRC services by going to the HMRC’s Government Gateway.
1.The goal of Making Tax Digital
It was like the transformation of the tax system by the year 2020. That was the main concept evolved and considered as the main goal of the UK’s government.
The plan was to quarterly updating for landlords, businesses, covering self-assessment, corporation tax and VAT.
This phased commencement of the above was presented in the form of Making Max Digital to the government. After proper formulation, the plan got formulated and implemented in 2018-2019 and 2020-2021 as the tax years.
This plan was later was revised in 2017 and that got delayed to April 2019. Making Max Digital submit your VAT Returns in UK was the first that came into action.
2.Announcement Made On 13th July 2017
On 13th of July, 2017 the HMRC published its second Finance Bill of 2017 that implemented the changes to the Making Max Digital initiative.
The government quoted to believe that commencing on a new digital platform tax system was the right decision to move in. The amendments that were made are –
Only the VAT-registered businesses will have to keep the digital records and only for VAT purposes.
That needs to be performed from 1st April 2019.
Businesses will not be asked to keep digital records or update HMRC quarterly for other taxes until minimum April 2020.
3.What does that mean for the businesses?
If you are certified VAT registered then you need to get on to the digital record keeping. That is using the software to record all your VAT invoices and receipts.
If you are not registered then the digital recording keeping goes optional for you. Though, the businesses will be able to gain updated income tax estimates whenever they want that will help in the processing of cash flow forecasting.
If you are VAT registered and yet not use the software, you need to start planning for Making Tax Digital. The new implementation date is 1st April 2019.
There are so many of the factors that have been formulated and this is the kickstart for giving a proper meaning to the functioning of the business. All that is required enough to perform is getting registered for VAT as that will pose much benedictions to the businesses than the others.