Nearly every UK business will be affected.
In a nutshell:
VAT registered businesses with turnover above the VAT threshold (currently £85,000 excluding VAT).
The remaining VAT registered businesses – those voluntarily VAT registered with VAT-able turnover under £85,000.
(The start date will be confirmed by the government following the successful rollout of Making Tax Digital for VAT.)
Sole-traders, Partnerships, Landlords and trading companies.
It’s likely that:
As part of their drive to reduce mistakes, HMRC are encouraging businesses to move away from keeping their records on spreadsheet software like Microsoft Excel and Google Sheets. When Making Tax Digital takes effect, you won’t be able to submit your spreadsheets directly to HMRC as part of a VAT return.
Ideally, to avoid any hassle you should be using an all-in-one financial management system that keeps MTD-compliant records calculates what you owe and allows you to submit your VAT directly to HMRC.
Gerhard Visagie from Exceed Accountants commented that “business that doesn’t make the change to MTD compliant software soon, will face significant challenges and additional costs to submit information to HMRC. Apart from having a tool to comply with MTD, a good accounting and reporting system is crucial in running and managing one’s business”.
Exceed has already migrated the majority of their clients to software that will make MTD a non-issue. If you would like them to help your business get ready for HMRC changes, please contact firstname.lastname@example.org