Making Tax Digital is an HMRC initiative that requires VAT registered businesses to keep digital records, it has literally just been rolled out to businesses with VAT returns due after March who weren't part of the trial. For example if your VAT period is April-June, you must keep digital records from 1st April 2019 and your deadline for mandatory MTD filing is 7th August 2019.
At the moment HMRC will still receive the same information as before, but instead of you manually inputting via your account, you now submit via software, eventually HMRC will be able to see more then this. You are not required to submit via this method, if you have registered voluntarily (your taxable turnover is below the VAT threshold), there are other businesses who are exempt and you can view these here.
It is recommended to keep up to date with HMRC, in case they make changes to these exemptions.
If you are unsure about what software to use, HMRC lists all the compliant software that is currently approved here. At this moment in time, you don't necessarily need to sign up to new software you can use bridging software, there are free versions out there, hich work very well. However, due to the level of information, it is anticipated HMRC will need, it may be best to make the switch now as the bridigng software, as it stands, will only submit certain information.
There's lots of great software on the list including Sage, Xero, Quickbooks and Pandle which we love using here at Tidal Bookkeeping Cornwall.
If the thought of MTD is a worry and you just don't want the hassle or don't know where to begin, please get in touch to see how we can help.
We provide a great outsourced bookkeeping service within Cornwall and are happy to discuss your requirements.
The information featured in this article is for guidance only, no liability is accepted for the opinions it contains.