Just when you thought you were done with the many acronyms shaking up the travel industry over the past year, there is the Government’s MTD initiative that will require your attention in the new year. It’s a new piece of legislation that will come into effect on 1 April 2019.
What is it?
MTD or Making Tax Digital is an important part of the UK government’s moves to “make it easier for individuals and businesses to get their tax right and keep on top of their affairs.” (And for HMRC to reduce the amount of lost taxes each year…)
After April of next year VAT returns will need to be filed electronically, so that there is a digital trail from the source data to the return submission. In practical terms this means that all businesses including travel companies will need to make sure that the software they use can store, supply and receive information digitally via HMRC’s platform.
Does it affect you?
As mentioned above, this new legislation applies to all VAT-registered businesses with a taxable turnover above the VAT registration threshold (currently £85,000 a year). So, this will include businesses within the travel industry as well.
All businesses MTD applies to must ensure they will be able to do the following:
- Store digital records;
- Provide information to HMRC and VAT returns from digital records using HMRC’s API platform
- Receive information from HMRC through the HMRC API platform.
What can you do to prepare?
If you’re already partnered up with a tech supplier that is preparing for these changes, there’s no need to be worried. If you’re not, then now is as good time as any to start thinking about what technology partner can help you to be ready when Making Tax Digital comes into effect next year.
Still a bit confused about it all?
Check out this article by Elman Wall for more details. Or you can find more information on the HMRC website.