A FIRM in Swindon is alerting local companies about a new digital tax system which is being rolled out from April.

Optimum Professional Services, based in Regus House on Whitehill Way, is issuing guidance on the Making Tax Digital portal which goes live next year, and is being run by HM Revenue & Customs.

The new rules mean that from April 1 it will be mandatory for all incorporated businesses that are VAT registered and over the turnover threshold of £85,000 to file their VAT returns via a new online portal called Making Tax Digital, requiring certified MTD software.

It will gradually be phased in for other businesses over the threshold before being rolled out across the board for all businesses from April 2020.

Mandy Gibson, tax supervisor at Optimum Professional Services, told the Adver: "HMRC is saying that there will be penalties for non-compliance, but I imagine it will be quite lenient for the first 12 months to allow everyone to get everything underway.

"There certainly will be penalties when it's all up and running.

"Ideally companies would need to move onto a cloud-based software beforehand.

"Companies can use the software to keep their books and records, which can be accessed by their accountant, who can use the information to file the digital VAT return."

Eventually, Making Tax Digital requirements will also cover accounts, quarterly returns and self-assessment, all of which will need to be filed using the MTD-certified software online.

One example of the software which is digitally compliant for the change is QuickBooks.

Other than that the change might well look the same to businesses once they upload their accounts through the software.

"Nothing changes a great deal at first, just the way that it's done. The return will look very similar," added Mandy.

"The problem is, so many businesses aren't aware that Making Tax Digital is coming. We're trying to educate our clients, and get them onto the cloud-based software before it gets to the last minute."