Companies with a taxable turnover above £85,000 will be affected by the new ‘Making Tax Digital for VAT’ obligations, meaning manual records are no longer accepted and VAT return forms will need to be submitted digitally via accounting software, rather than the current process of manually entering the VAT return figures onto the HMRC portal.
All businesses within Making Tax Digital will need to keep records and file returns digitally using ‘functional compatible software’ – defined by the HMRC as a programme or set of programmes, products or applications which are able to record and preserve digital records, submit digital tax returns and receive digital information from the HMRC.
Some businesses are exempt from the requirements if their religious beliefs prevent them from using computers or for reasons of age, disability or remoteness of location. Those businesses which have registered voluntarily (i.e. those with a taxable turnover below the threshold) can opt into the arrangements.
ABTA has two guidance notes for Members. The first gives an overview of Making Tax Digital, including what should be kept in a digital format, and the second looks at it in the context of VAT TOMS. Both are available in the MemberZone at abta.com/makingtaxdigital. There is also a dedicated webpage with information about ABTA Partners that can offer Members further support.
ABTA Members will also be able to hear more about the new process at the association’s annual Travel Finance Conference, taking place at KPMG in Canary Wharf, London on the 26 and 27 February 2019. There will also be a dedicated break-out area for further information and one-to-one guidance.
Carolyn Watson, ABTA’s Director of Finance and Resources, said: “It is important that our Members plan ahead and make sure their accounting systems are ready for Making Tax Digital. Software and process changes may need to be implemented, so businesses will need to be well prepared.
“We have guidance notes about the new requirements, which are intended to give Members an initial steer through the requirements and signpost them to further information. For further advice we recommend that Members speak to their accountant or alternatively one of ABTA’s Partners for accountancy and software support.”