Getting Ready for Making Tax Digital

Making Tax Digital (MTD) is HMRC’s programme to move UK tax records and returns online. For VAT-registered businesses, it means keeping digital records and filing returns using compatible software rather than typing figures into a web form.

What Changes for Your Business

The biggest shift is that your records need to be digital from start to finish. Sales, purchases and the VAT on them should be captured as you go, not rebuilt from paper at the end of the quarter.

A simple preparation checklist

• Make sure your business details and VAT number are up to date
• Record every sales invoice and purchase bill digitally
• Reconcile your bank account regularly so nothing is missed
• Keep supporting documents (receipts, contracts) somewhere you can find them

When your records are complete and up to date, the VAT return is mostly a matter of checking the numbers.

Building the Habit

The businesses that find MTD easiest are the ones that keep their books current every week. A short weekly routine of raising invoices, recording bills and matching bank lines saves a long and stressful quarter-end.

“Good records aren’t extra work. They’re the work you would have done anyway, done on time.”

In BizHub, UK companies keep invoices, bills, expenses and bank transactions in one place, with VAT shown throughout. Check HMRC’s current guidance for the exact requirements that apply to your business.