How To Avoid Receiving Making Tax Digital Penalties
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Making Tax Digital (MTD) has got taxpayers in a panic. Don’t comply with HMRC’s requirements and you risk a penalty. But it doesn’t have to be this way. You just need to know how to abide by the MTD rules and use HMRC MTD software. Here, we detail exactly this.
All VAT-registered businesses who have a taxable turnover above the threshold (currently £85,000) and do not have a reason to be exempt from filing digitally, will need to do so for their next quarterly return. The only exception is those enterprises that have been given a six-month delay, meaning they have to file before their next quarterly period after 1st October. Such businesses include trusts and not-for-profit organisations.
Whenever MTD for VAT begins for you, the return deadline is always one calendar month and seven days after the end of the quarterly period. For example, if your return period was 1st April – 30th June, you would need to submit by 7th August 2019. Once you’ve determined the deadline, you will then need to ensure that you file on time.
The submission should be compliant with HMRC’s digital path. There are a few factors involved in this, including storing the right electronic records. Amongst these is information associated with your business like the VAT number and details of any scheme. VAT-related data, such as the amount charged and received, is also required.
On top of this, these records are required to have digital links. This entails accounting tools, though HMRC have also allowed the use of spreadsheets via bridging software. It must be API-enabled, and on HMRC’s list of recognised suppliers.
Employing HMRC MTD software is key. Don’t use this, and all your other efforts to avoid a penalty are futile. And it’s not just compliance this type of software offers – if you choose the right one, it will provide other great benefits too.
For example, it will be able to integrate with any other accounting systems. This will save time – as will one-time data entry.
Ideally, the Making Tax Digital software would also be scalable, like Liquid Accounts’ VAT Filer. It allows you to add multiple companies and users, so if you grow, your MTD software can as well. Instant confirmation is a feature too, giving you peace of mind via two-way communication with HMRC. And the ultimate assurance is provided by our tools being HMRC-recognised.
Even if you don’t require the MTD-compatible software right now, Making Tax Digital is set to be rolled out to Income Tax and corporation tax in the future. Therefore, the sooner you prepare – the better.
It’s super easy to get started with our MTD VAT Filer. Simply get in touch with our friendly team by calling us today on 0161 413 5050 or sending an email to info@liquidaccounts.com.