Making Tax Digital (MTD)

April 2019 deadline

The official word from HMRC is that all VAT-registered businesses over the threshold for mandatory registration (turnover above £85k) must file VAT returns directly from their accounts software, as part of the Making Tax Digital (MTD) initiative, starting April 2019.

See the full article on the government web-site here

"So that means we have to move to cloud-based accounting software... right ?"

WRONG !!

Compliant software

The government has committed that it will not widen the scope of Making Tax Digital for Business beyond VAT before the system has been shown to work well, and not before April 2020 at the earliest - but there's no "road-map" as such at the moment.
So there will undoubtedly be more changes to come... which will undoubtedly mean more changes to your book-keeping / accounts software too...
So now might be a good time to think about updating it, and keeping it up to date...
BUT...

There are options!

Despite what you might read elsewhere, it is NOT necessary to move to cloud-based accounting software...
It might not even be necessary to upgrade your existing software (or start using some if you're not at the moment... even simple spreadsheets can still be useable);
Both Sage and Intuit have desktop products that support the new Government Gateway - they just don't seem to mention it very prominently (probably because they want you to move to their cloud-based products).
Sage have even rebranded their desktop product as "Sage 50cloud" ... which, for a non-cloud-based product, can be a bit confusing !?
(i.e: "Sage 50cloud" is the desktop product; "Sage Business Cloud Accounting" is the cloud-based product).

There are of course other alternatives too.
Not only is there a long list of software that already supports the new HMRC API, but there's also lots of "bridging software" that provide a stepping-stone from pretty much any accounting software (or even spreadsheets) into the new Government Gateway.
See the full list on the Government web-site here