In April 2019 the UK government’s plans for Making Tax Digital (MTD) for came into operation. So what is Making Tax Digital and what will it mean for law firms?
Essentially, legal and other businesses that meet the VAT threshold will have to keep their records digitally and provide their VAT return through MTD compatible software.
The cornerstones of MTD.
There are four main reasons for the change to digital taxation:
Better use of information.
Business owners won’t have to give HMRC information that it already has, or that it is able to get elsewhere. For instance from employers, banks, building societies and other government departments.
Tax in real time.
HMRC will collect and process information affecting tax as close to real time as possible, to help prevent errors and stop tax due or repayments owed building up.
A single financial account.
By 2020, customers will be able to see a comprehensive financial picture in their digital account, just like they can with online banking.
Interacting digitally with customers.
Business owners will be able to interact with HMRC digitally and at a time to suit them. They already have access to a digital account which will present them with an increasingly personalised picture of their tax affairs. This will be assisted by prompts, advice and support through webchat and secure messaging.
LawWare & MTD.
We have been working closely with the tac authorities and are now fully HMRC recognised. This has led to the development of a new application within the LawWare software that will allow users to submit VAT returns directly.
The application is now available to all LawWare clients.
You can find further information on Making Tax Digital for law firms by following the links below.