The government is making fundamental changes to the tax system, to make it more effective, efficient and simple for taxpayers. These changes will also help prevent errors and mistakes that are estimated to cost HMRC more than £9 billion in lost tax every year.
Making Tax Digital (MTD) for Business is the government programme designed to start plugging this tax gap and help businesses get their tax right.
As the first step on that journey, from April 2019 VAT registered businesses that have an annual turnover above the VAT threshold (£85,000) will be required to keep their records digitally (for VAT purposes only). They will have to provide their VAT return information to HMRC every month or quarter, using HMRC-approved, MTD-compatible software, and they must store their VAT records digitally for six years.
Although initially these businesses have to submit monthly or quarterly VAT summaries that are really just headline summary totals, in time it’s expected that this requirement will expand to include all transactional data.
More information is available at www.gov.uk – simply type ‘Making Tax Digital’ in the search box.
RedSky has a solution
RedSky has an in depth understanding of the MTD requirements. We are an active member of the British Application Software Developers Association (BASDA) working group, which made an important contribution to the government’s lengthy MTD consultation process.
We have developed functionality that allows our customers to record their MTD information in the correct format with an option to use a new API Submission module to submit VAT Returns to the government website.
Find out more about Making Tax Digital in Summit or any of RedSky’s construction-specific software solutions.