?Start planning immediately?: HMRC begins Making Tax Digital pilot
With six months to go until the first stage of HMRC?s Making Tax Digital is introduced, the tax office has rolled out its first test pilot. HMRC has invited more than half a million business owners with ?straightforward? accounts to road-test the new model. At the end of October, a further 100,000 business owners will be able to apply for entry onto the pilot. Companies which trade with European Union State members, charities, and businesses which pay VAT on account are among those businesses who remain excluded from the pilot. Watch: How to sign up for Making Tax DigitalRead more HMRC content:
From 1 April 2019, all VAT-registered businesses (taxable turnover above ?85,000) will need to keep their VAT records digitally and file their returns using Making Tax Digital-compatible software. HMRC claims the initiative will make the UK?s tax administrative more effective, efficient and easier for taxpayers to submit correct returns.
Following the pilot?s introduction, Brian Palmer, tax policy expert at the Association of Accounting Technicians (AAT), urged small business owners to sign up as soon as possible. ?If your business is in a position to do so ? as?one in three AAT members told us?they were at the end of September ? it makes total sense to engage with the pilot as soon as possible. That way, you can get fully involved with the opportunity to test the system in full, and train up all affected employees and clients where needed. In addition, you?ll be in a position to let HMRC know of any remaining teething problems prior to mandation itself. ?If your business isn?t ready to join the pilot, I?d strongly advise that you start planning immediately to ensure the business can join well ahead of next April. There?ll be no prizes on offer for waiting. Of the 150 or so providers who have said they will provide MTD-compliant software, over 70?have?already had their solutions recognised on HMRC’s website.?If you think it wise to test the system in full before next April and your provider is ready, there?s little point in waiting, you might as enrol to join the pilot straight away.? Read more about Making Tax Digital:
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
The financial secretary to the Treasury explains why Making Tax Digital is the right way to go for small companies, and offers tax compliance tips from both a political and a business perspective. more»