Making Tax Digital for Nurseries
Making tax digital is part of HMRC’s initiative to become one of the most digitally advanced tax administrations in the world.
In a nutshell, Making Tax Digital (MTD) requires companies to submit their VAT returns via digital accounts software instead of logging into HMRC and submitting it themselves.
The list of accounting software that can be used can be found here.
The government began piloting the scheme in October 2018 and by October 2019 most VAT registered organisations should be taking part.
How does MTD affect nurseries?
At the moment, only VAT registered organisations are affected by Making Tax Digital.
As the majority of Childcare services are VAT exempt, MTD is not relevant at the moment.
The ministerial statement of 13 July 2017 stated that:
The Government will not widen the scope of MTD beyond VAT before the system has been shown to work well, and not before April 2020 at the earliest.’
This means that MTD won’t affect VAT exempt Childcare Providers until at least April 2020, and many reports predict that it will be delayed further.
What if I am VAT registered?
Complying with MTD isn’t as difficult as it may first seem.
You must ensure that you (or your accountant) uses an MTD compatible software to submit your VAT returns.
Each of these systems can link directly to HMRC and file a digital tax return for your company.
Can Connect Childcare help?
Nurseries that use Connect Childcare can transfer their financial data to the most popular compliant accounts packages, Xero & Sage.
To find out more about our accounts exports give our friendly team a call on 01282 507 945