09 Aug Ways Making Tax Digital impacts on your startup
The government’s shake-up of the tax system – Making Tax Digital – will impact on all businesses; including startups. This major change to the way taxes are reported and administered means any business start-ups need to ensure compliance from the launch date. If you’ve never even heard about Making Tax Digital, this brief guide from the experts at SQK Accountancy offers some useful tips:
1. Making Tax Digital cuts out the requirement for annual tax returns
Once the Making Tax Digital (MTD) system is fully implemented there will be no more need to complete annual tax returns as all financial data will be transmitted digitally to HMRC four or more times each year. In order for this to happen all businesses and self-employed individuals need to set up a digital tax account.
2. Making Tax Digital is already rolled out for VAT
The MTD digital VAT returns system rolled out to all eligible businesses on 1 April 2019. If you’re thinking about registering for VAT from the outset of trading, then you will need to ensure your returns are compliant with the requirements for digital returns. This means ensuring your software is compatible with the HMRC digital platform, and all your accounting practices will need to follow standard guidelines. In essence, recording VAT manually or on spreadsheets, or making any manual alterations to computerised records has already become a ‘no-no’ within the business world. If you would like to find out more about VAT returns for MTD purposes, get in touch with us today.
3. MTD will impact on all other business returns and payroll
Income tax returns, corporation tax returns, and all payroll returns will soon fall under the umbrella of MTD. The current deadline is 2021 or later, but savvy business owners need to put procedures in place at the earliest opportunity.
You can find out more about Making Tax Digital on the UK government website. It’s vital to start planning for this massive change to the UK tax and returns system at the earliest opportunity, so even early stage start-up business leaders need to prepare accordingly.
If you’d like to find out more about MTD and the ways your startup can comply with all new and upcoming legislation, get in touch with SQK Accountancy today.