Steps you must take to comply with MTD deadline

Steps you must take to comply with MTD deadline

Like it or not but the MTD deadline is a reality and any business that has an annual turnover of over £85,000 must comply before April 1, 2019. In essence, this law demands that any business that falls into this category must have their books and records in digital form so therefore get a digital tax account with HMRC and submit their tax returns in MTD compatible software. A big number of SMEs will feel the weight of establishing this system but it’s inevitable.

For you to be compliant, you must take the following essential steps

Step 1: Stop filing paper records

If you are maintaining your records on paper, then it’s high time you departed from the dark ages and change go digital. If your business turnover is above £85,000, those spreadsheets and manual bookkeeping systems you use will become a thing of the past of come April 1st, 2019. Therefore, you need to look for a reputable MTD professional to establish the HMRC compliant software, early enough so that you don’t have to rush the last minute.

Step 2: Ensure you are connected

Whatever gadget you use, whether a desktop, laptop, smartphone or such, you must ensure that you have an internet connection so that you have all your business data fed to your system as per the requirement on Making Tax Digital. The HMRC’s main objective behind this initiative is to ensure that there are minimum tax return errors and therefore make tax audits easier. The software will also reduce the hours that are used during manual investigations, looking for inconsistencies and hunting for mistakes.

Step 3: Get a Digital Tax account

Whether it’s a charity, business or partnership, the law requires that you get a digital tax account with HMRC. Again, you will be required to give returns digitally on a quarterly basis. This information will also be useful to the banks, and relevant government departments.

Step 4: Get HMRC compliant software

So as to comply with the HMRC requirement, you will need to have a cloud accounting package which will be used for keeping record digitally and submit in that format on a regular basis. You have your specific business and accounting needs and therefore when selecting a compliant Making Tax Digital Software, ensure that it gives solutions for such.

Step 5: Go online and begin to file your VAT

Once the MTD deadline arrives, you will not be allowed to enter your VAT figures into the existing MTD portal and therefore you’d better begin feeding the relevant data directly through your accounting software. As the adage goes “practice makes perfect,” begin filing your returns early and get used to the process before the deadline.

Step 6: Get an MTD consultant

In essence, this is the first and the most important thing that you need to do. You now know that Making Tax Digital is not an option but a legal necessity. Therefore, get a reputable and reliable professional who will guide you in getting the correct HMRC compliant software. This is the person who will also train your members of staff for a seamless transition.

The earlier the better, get started with compliance to MTD. Don’t wait for the deadline; it might be expensive and quite an inconvenience for you and your business if not.

Category Business

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