Making Tax Digital is the UK government’s initiative to digitize the tax filing process. The program will be implemented in phases, and for many businesses, the deadline for compliance is fast approaching.
If you are not sure how to get ready to prepare for Making Tax Digital, don’t worry – we’re here to help. In this article, we’ll outline five key steps you need to take to ensure you’re compliant with the new rules.
So, without further ado, let’s get started!
Check If You’re Affected by Making Tax Digital
The first step is to check whether or not you’re affected by Making Tax Digital. The program will only apply to VAT-registered businesses with a taxable turnover above the VAT threshold (currently £85,000).
In case you don’t meet these criteria, then you don’t need to take any further action – Making Tax Digital won’t apply to you.
Get Set Up With The Right Software
If you are affected by Making Tax Digital, the next step is to get set up with the right software. You’ll need to use compatible software in order to file your taxes digitally, and there are many different options available on the market.
Talk to your corporate tax accountant or bookkeeper to see what they recommend, and make sure you choose a program that’s compatible with Making Tax Digital.
Keep Your Records in Order
Once you’ve got the right software in place, you need to start collecting and organizing your records. Making Tax Digital requires businesses to keep digital records of their income and expenditure, so you’ll need to start tracking this information using your software.
This may seem like a daunting task, but it’s actually not as difficult as it sounds. Simply make sure you’re keeping receipts for all your business expenses and recording your income as it comes in. With a little bit of organization, you’ll have everything you need in no time.
Register For Making Tax Digital
The next step is to register for Making Tax Digital with HMRC. You can do this online, and you’ll need to provide some basic information about your business, such as your VAT number and contact details.
Once you’re registered, you’ll be able to access your Making Tax Digital account and start filing your taxes.
File Your Taxes
The last step is to file your taxes using your Making Tax Digital account.
You’ll need to submit your VAT return online, and you can do this either quarterly or monthly, depending on your preference.
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Make The Switch To Digital Tax Filing Today
Making Tax Digital is a big change for businesses, but it doesn’t have to be a difficult one. By following these five steps, you may ensure you’re compliant with the new rules and get your business ready for the transition.
Just like with anything new, there is a bit of a learning curve involved in Making Tax Digital. But once you are used to, you will ask questions about how you have ever succeeded without it!