What is Making Tax Digital Software?
From the 1st April, businesses will have to maintain all digital records and submit VAT returns using specialist software known as the Application Programming Interface or API.
This is following a Government announcement stating that all businesses with a taxable turnover over the VAT threshold of £85,000 will need to ensure that all financial records are stored, maintained and submitted in digital format to the HMRC.
The main aim of the Making Tax Digital Initiative is to streamline the process so that businesses of all shapes and sizes can enjoy improved efficiency and accuracy when it comes to staying on top of their finances.
And if you haven’t already done so, now is the perfect time to start thinking about investing in Making Tax Digital Software for your business, so when the new rules come into force, you won’t be caught out!
But what is Making Tax Digital Software?
Making Tax Digital software will allow you to record and submit all of your financial data quickly and easily.
However, you must use software that is HMRC compatible as the HMRC will only accept VAT returns that support Making Tax Digital for VAT.
There are a whole host of approved and recognised accounting software that can be used, allowing you to access your accounts, keep track of your tax balance, make payments and keep on top of your finances, 24 hours a day, wherever you are in the world. It is also easier to trace individual transactions.
Are you ready for MTD?
At the same time, the Government has made it clear that businesses should ensure that their existing accounting records are compliant with MTD regulations and that all VAT policies and practices are up to date.