Members of Abta are being reminded of a fundamental change to tax administration being introduced from April 1.
The HM Revenue & Customs regulation requires most UK companies to maintain their accounts information in a digital format and file VAT returns digitally.
Firms with a taxable turnover above £85,000 will be affected by the new ‘Making Tax Digital for VAT’ obligations.
This means that manual records will no longer accepted. VAT return forms will need to be submitted digitally via accounting software, rather than the current process of manually entering the 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 – 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.
Members will also be able to hear more about the new process at the association’s annual travel finance conference on February 26-27 at KPMG in Canary Wharf, London.
Abta finance and resource director Carolyn Watson 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.”