Making tax digital (MTD) was phased in by HMRC wef 2019 with the stated aim of ‘making it easier for individuals and businesses to get their tax right and keep on top of their affairs’. In layman’s terms, MTD requires taxpayers to keep up to date and accurate their tax records on book-keeping software. Many commentators belief the actual aim of MTD is to enable HMRC to collect more tax.
So What Changed on 1 April 2019?
All VAT registered businesses with a turnover in excess of the VAT threshold (currently £85,000 a year) became required to keep business accounting records in an electronic format. They also became required to submit future VAT returns electronically using connected software. The option to use the Government Gateway for submitting VAT returns ended.
This was just the first step of MTD. Subsequently, you will be required to submit quarterly returns of ‘real time’ business accounts. This will effectively be the delivery of quarterly accounts to HMRC in addition to annual accounts, and will require up-to-date electronic accounting information to be available throughout the year. Timetable for introduction for other taxes:
- 6 April 2024: MTD for individual landlords with >£10k pa of rental income.
- 6 April 2025: MTD for general partnerships.
- No sooner than 2026: MTD for corporation tax.
Act Now, We Want to Help
To make these reporting changes as smooth and painless as possible, we want to assist you and your business to transition from existing book-keeping and accounting processes to digital connected accounting software (ideally, cloud hosted). Acting now will ensure everything is in place, tried and tested, all in good time.
Read our latest MTD blogs below and keep up with the most recent developments as well as our newsletters and events created to keep you up to date with the MTD journey.
Whitings have looked after our shop business for many years, helping with payroll, VAT and general taxes. They always have an eye on improving the business for the future.