Making Tax Digital is an HMRC initiative that will revolutionise the UK tax system. HMRC are taking a major step forward with the introduction of MTD from 1^st April 2019. We feel this is probably the biggest step since the introduction of RTI for PAYE in April 2013. Initially, HMRC only plans on making VAT filing digital but by 2020, other taxes may also become digital.

MTD – Making Tax Digital, although some might see it as making tax difficult, we at Silvertree see this as an opportunity rather than an obstacle. We understand what HMRC are trying to achieve from MTD and the theory behind it.  

The new system will be implemented for VAT from 1^st April 2019 through online accounting systems and submission will be made in real-time and businesses will be required to keep records digitally. Businesses can file their VAT returns using HMRC-approved software (please refer to www.gov.uk for a full list of approved providers). Returns can also be filed using an API (Application Programme Interface) or bridging software. The bridging software is used to enable VAT filing from a spreadsheet. HMRC are aware that not all bookkeeping software will be able to handle complex VAT issues and that spreadsheets may still be required, hence HMRC allows the use of bridging software. Please note, at present there is no requirement for data to flow directly from an accounting or bridging software through to HMRC’s system, however, this may well be the case in the future and certain software providers are already preparing for this.

At Silvertree Accounting, we can support you all the way through the MTD process. Our aim is to ensure that all our clients are MTD-compliant from launch. We will strive to act as Jargon buster to our clients by simplifying technical accounting terms for them and helping them to better understand MTD and the new legislation.  We will also to keep our clients informed about all the necessary changes that takes place with MTD so that they can spend their valuable time focusing on their business.