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Thinking About Digital Tax And How To Comply

This a topic which is gaining traction out there but is still little known about by those who will need to adapt.

From April 2019 HMRC will not accept VAT submissions through their online gateway. Businesses will be obliged to submit their returns using digital tax software, such as Sage or Xero. This means businesses currently using excel spreadsheets to calculate their VAT will need to move to a digital tax software solution.

The threshold to register for VAT is £85,000 turnover and you must register if you do more than this. Anyone else can register for VAT voluntarily but it brings with it an obligation to complete returns. However doing so can improve cash flow as you get a refund from HMRC if the value of your purchases exceeds your sales. Registering for VAT early also means you dont have to explain to customers why your prices have increased (when you register for VAT later).

The guidance provided by HMRC in this link attached here provides a good insight: Overview Of Making Tax Digital

There are a number of good digital tax software packages that will fulfill your accounting needs depending on your business. Software will help you comply with digital tax bookkeeping obligations if you are VAT registered. For example you might work alone at home; or there might be two or three of you working together in a business. There are some good options depending on your budget and what you need.

You could have an established business and use spreadsheets to calculate your VAT figures; or you may be starting up a new business and are likely to pass the VAT threshold; or are considering registering for VAT anyway. In either case give us a call and we can help you register for VAT, set up digital tax software suited to your needs and much more to help you get going.