HMRC’s Making Tax Digital initiative is edging ever closer. So with just over a year to go until it comes in here is a review of where we are.
The latest update to the schedule from HMRC was in July 2017: https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital
This delayed the roll out somewhat however the first phase is still imminent. Whilst the later phases are still clouded in confusion, the initial phase which covers VAT is now coming and clients will need to submit their VAT returns straight from software. No more totting up invoices on a calculator and then typing the VAT return numbers in to the HMRC VAT portal. It isn’t even clear if a spreadsheet will suffice.
So the bottom line is that in practice all VAT registered businesses should be converting to electronic book keeping by the end of 2018 to be ready for the change. Clients using old unsupported versions of Sage will either have to upgrade to the latest version or even better convert to a cloud accounting package.
Many of our clients wont notice the difference as the are already on Xero, Freeagent or Kashflow either supported by us or with us doing their book keeping. However the few that are still calculating VAT returns manually and then giving us a shoe box at the end of the year will need to convert as soon as possible.
If you are unsure about what you need to do give us a call and we will point you in the right direction.
There is more detail here from the Tax Institute. https://www.tax.org.uk/policy-technical/technical-news/making-tax-digital-vat-main-issues-consideration