Accountants / Agents

7 Things SMEs need to know about Making Tax Digital (MTD)

By September 5, 2019 No Comments

Does MTD apply to my business?

From April 2019 Making Tax Digital (MTD) applies to all businesses in the UK that have an income above the VAT threshold of £85.000. Businesses under the threshold can voluntarily make tax digital but don’t have to.

How much will MTD cost my business?

As an estimate the HMRC says that will cost businesses around an average of £280 that’s the setting up of an MTD compliant solution. This is only an estimate and the cost will vary for all businesses and for small businesses it would be wise to take financial help to look at the number sooner rather than later. Making Tax Digital once all set up and running will help your businesses to run more efficiently and will help to prevent mistakes so in the long run helping to manage the businesses money.

When are the MTD deadlines?

The deadline for Making tax Digital (MTD) for businesses with a turnover above the threshold which is £85.000 is April 2019.

How will MTD benefit my business?

By Making Tax Digital there are plenty of benefit that will help your business.
Some of the benefits include:
• Less likely to make mistakes
• Being able to check Tax record frequently
• Less paper work and records
• Helps to have the ability to plan for business growth
These are not only all the benefits, MTD compliant software like Swift Vat Pro has many brilliant new features and tools. Generating invoices, record receipts, keeping up to date on business expenses and running payrolls has never been easier with these tools so these are more benefits you must look forward to when Making Tax Digital (MTD).

How can my business prepare for MTD?

There are many ways for you to start preparing for MTD (Making Tax Digital) and one of the first ways that I would advise you to do is to work out your business’s own deadlines. You want to make sure that all your financial data is ready to be used in your new system when MTD arrives. The second main way you can prepare for MTD is by deciding on which MTD compliant solutions is best for your business. Two other ways to get prepared is to come up with a budget, MTD is going to cost your business so leaving this step put could results in further problems. The last way is to get educated on Making Tax Digital, so you and your business understand the changes and why the changes are important.

Is our current accounting software MTD compliant?

Is your business already using an accounting software solution? Well if that is the case then you will need see if it is suitability for MTD compliance.
If you answer NO to any of these questions below then your current software isn’t MTD compliant;
• Can your solution receive data from HMRC digitally?
• Is your solution digital?
• Can you log all your financial information on your solution?
• Can your solution keep your financial data secure?
• Can your solution hold up to six years of financial records digitally?
• Can your solution generate a VAT return and share that return with HMRC digitally?

What are the penalties for non-compliance with MTD?

The government announced a point-based model as penalty system for non- compliance with MTD. Points will be given for missed payments such as VAT and Corporation Tax. The good new is that these points and penalties will not be put in place until 2020 so you and your business have time to get used to the system.

Swift VAT Pro
467 Great Horton Road
West Yorkshire

T: 01274 575671