As a very important initiative from the HMRC, Making Tax Digital is all set to bring out a new revolution in the UK VAT system. Now all the businesses that are registered for VAT will have to digitally maintain all their records and submit the VAT returns with help of MTD compatible software. The main motive of enforcing Making Tax Digital is improvement and digitization of the tax administration. As it will now be much more effective and efficient. It also makes it easier for the taxpayers to get their tax right. The major sectors of making tax digital are as follows:
Making Tax Digital for Value Added Tax: This is for indirect tax levied upon the value of goods or services which are sold or purchased
Making Tax Digital for Income Tax: This is for the individuals who are self employed and individuals who have an income from property
Making Tax Digital for Corporation Tax: This is for direct tax on the income made by a corporate from their business
MTD is to be implemented with help of compliant software that is expected to record and save the digital records, provide these digital records and returns to HMRC using the API platform. Furthermore, it should also contribute in receiving information from HMRC using the API platform. Therefore, a spreadsheet can no longer be used as it is capable of recording and saving the digital records but it fails to share information to and fro with HMRC using the API platform.
In order to help you prepare and migrate to the Making Tax Digital initiative, ProboVAT will play a major role in digitally maintaining your records, submitting VAT return and also in communicating to and fro with HMRC through their API. ProboVAT is HMRC approved software which bridges the gap between your current business process and MTD. Its simplified process is user friendly making it easy for an accountant to carry out various checks as it prompts alerts for missing information or any such discrepancies. It automatically compiles your VAT return which can readily be submitted to the HMRC.