MTD will apply to all VAT registered businesses that trade over the registration threshold on 1 April 2019 or which exceed the threshold on any rolling 12-month basis thereafter. For those affected by the new rules bookkeeping software must be capable of keeping and maintaining the records specified in VAT regulations, preparing the VAT return using the information maintained in those digital records and communicating with HMRC digitally.
What about those below the threshold? Businesses already have to check their turnover for the last 12-months at the end of each month to see if it exceeds the VAT threshold. If it does then MTD applies from the first day of the following month. So as long as the business has annual taxable sales of less than £85,000 for the 12-month period ended 31 March 2019 and every rolling 12-month period thereafter, it has no MTD worries.
At Joseph Lawrence we have been working to assist clients to make the transition from manual records to a fully digital bookkeeping system. We are experienced in assisting businesses with popular software brands including Xero and Sage listed by HMRC as software that will be compatible with MTD for VAT.
It is important that the transition is made early to avoid technical issues that may arise, allowing plenty of time to get to grips with the new system and ultimately ensure full MTD compliance by the start date.
Time is short, so action needs to be taken now. Speak with a professional adviser at Joseph Lawrence to understand the new rules and how they may affect your business.