MTD, or Making Tax Digital is going to have a profound impact on businesses over the next few years. But it’s not only businesses, it will also make a big difference to the way that accountants support their clients. Benjamin Dyer, CEO of Powered Now, looks at how MTD will impact the relationship between clients and their accountants.
There is now a lot of MTD Software available at various price points. It ranges from accounting software which will do your accounts as well as submit MTD returns, to software designed to help you run your business and which is special to your industry but which will also do your MTD VAT return.
The biggest problem with the MTD for VAT implementation is the short time in which this is expected to happen. There is a big chance that companies supplying solutions will be overwhelmed by the demand for help in the available time.
Penalties for failing to file MTD for VAT returns on time will follow a points system. HMRC have stated that no actual fines for non-compliance with MTD for VAT will be levied in the first year when the business has made reasonable efforts to comply.
To comply with MTD a business or its agent (typically their accountant) must keep their records electronically. In other words, when a tax return of any sort is made to HMRC, it must be possible to look at the records that justify the tax return and those records must be held on a computer.