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MAKING Tax Digital for VAT comes into force from 1st April 2019 for businesses with annual VATable turnover of £85,000 or more and will bring significant changes to the way businesses are required to record their financial transactions for VAT.

This means for VAT returns starting after 1 April 2019 there will be a requirement to record and retain digital records. While many businesses may think they are already doing this, it will become compulsory to record the following information for every taxable supply:

  • Time of supply (tax point)
  • Value of the supply
  • Amount of input tax that you will reclaim

What this means for many businesses is that every purchase invoice will have to be recorded individually. The VAT Return will also need to be submitted via digital API enabled accounting software. For businesses operating the VAT retail scheme they can record sales on a daily gross takings basis.

If you’re one of the thousands of businesses using spreadsheets or recording purchases from statement totals or payments, then now is the time to make that change to digital compliant software, like Xero, and to take advantage of invoice scanning software such as AutoEntry.

This shouldn’t be seen as a chore but rather an opportunity to streamline your bookkeeping.

As Platinum partners of Xero accounting software we have hundreds of happy clients that have made the digital switchover to Xero and they tell us Xero has transformed the way they do their bookkeeping, some say it is much quicker others say it also gives them a better handle on their financial information in a more timely manner.

Xero also connects to other great software such as AutoEntry, which captures and analyses details from scanned or photographed images of paper documents. Simply download the app to your phone or mobile device, take a photograph of a document and upload it or email it with just a few clicks.

Without the need to manually enter invoices you can expect huge time savings and with standardisation comes the added ability of identifying duplication and reducing the chance of error.

So, whilst changing or implementing new software may seem daunting, the benefits of Making Tax Digital compliance should far outweigh the initial challenges.

To ensure your business is compliant for Making Tax Digital, and to hear how digital accounting could really benefit you, please contact our Making Tax Digital team on 0808 144 5575 or email mtd@armstrongwatson.co.uk