SmartPropertyManager.com & Making Tax Digital

Introduction to Making Tax Digital (MTD)

Making Tax Digital is a key part of the UK government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs. The aim of the initiative is to make tax administration more effective, more efficient and easier for taxpayers, through the implementation of a fully digital tax system.

From 2019, VAT-registered businesses with a taxable turnover above the VAT threshold of £85,000 are now required to keep records digitally and to use software to submit their VAT returns through the Making Tax Digital service.

Making Tax Digital for property income tax will come into effect once the VAT scheme has finished a successful rollout. See the following HMRC guide for more details:

https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital

Who is affected by MTD?

If your business is VAT registered and your annual turnover is at least £85,000, you will likely need to submit your VAT returns under the MTD rules. There are some exemptions – refer to the HMRC guide above.

Businesses that are VAT registered, but whose turnover is less than £85,000, aren’t required to be part of MTD at this stage, but they can join it on a voluntary basis.

What does MTD actually mean for your business?

Under MTD you must keep all your VAT records in a digital format and submit the VAT return through MTD-compliant software. This is because HMRC want to reduce the number of human errors that happen when people manually type VAT figures into the form.

Apart from this, VAT returns will be due within the same timelines as before – for example, for quarterly returns this is seven days after the end of the month that follows the end of the VAT quarter – and VAT is payable as before – by electronic transfer, BACS, by direct debit or at a bank.

How can SmartPropertyManager.com help?

If you are an active SmartPropertyManager.com user then you are almost there:

• MTD requires all transactions to be recorded in a digital form. SmartPropertyManager.com has been helping its users do this since its inception.
• MTD requires VAT returns to be submitted through the HMRC’s Making Tax Digital online APIs. SmartPropertyManager.com now supports this.
• SmartPropertyManager.com has been reviewed by HMRC and is recognized as having met the requirements for MTD, so it can safely be used to submit VAT returns directly to HMRC.

If you are a VAT registered property management company in the UK, you can use SmartPropertyManager.com to keep digital records and then submit VAT returns directly to HMRC through the Making Tax Digital for VAT online gateway.

What next?

You can use SmartPropertyManager.com today to submit VAT returns through HMRC’s MTD gateway. Log into your account and go to the new UK VAT page under the Finances menu.

In addition, we are working on integrating with the Making Tax Digital gateway for Property Income Tax. We will be announcing more on this soon.