Brexit is not the only deadline over this weekend, but, unlike Brexit, the MTD deadline is not going to get deferred, delayed or ignored.
So what does it mean to small businesses. At the moment not that much, if your taxable turnover is below the VAT threshold – currently £ 85,000. Just carry on rekeying as before.
But for those with turnover above the threshold, your next VAT return after 1st April will need to use the Making Tax Digital service. You will also need to keep records digitally and use software to submit the VAT return.
If you use an existing software package, the functionality for MTD should be part of that package – check with your software supplier. if you use spreadsheets, then you will need to acquire bridging software to link your spreadsheets to the MTD service. If you use the “back of a fag packet” approach, then you need to act with some urgency!
Whichever category you fall into, you will need to register for the MTD service and adjust to it. You can apply to defer if you have good reason, but only for 6 months, So you may as well bite the bullet now.
What’s all the fuss about, you ask. Most businesses should maintain digital records already, especially those with a turnover in excess of £ 85,000. So its just a bit of an minor inconvenience in your processing, and an extra cost. But this is only the thin end of the wedge. MTD as a concept will steadily creep into every aspect of tax, and ultimately for every business owner regardless of size.
It may seem a pointless exercise at the moment, but big brother will soon enough want to know everything about you digitally, claiming it will benefit your own planning, when really all it is doing is shifting the burden and cost of tax collection to the tax payer rather than the tax collector.