Making Tax Digital
Making Tax Digital for Businesses and landlords (referred to as MTD) is a government initiative all about making it easier to manage and pay taxes.
What is Making Tax Digital?
MTD is intended to bring the UK tax system into the 21st century by providing businesses and landlords with a modern, streamlined system to keep their tax records and provide information to HM Revenue & Customs (HMRC).
The first to be affected will be businesses and individuals with a turnover above the VAT threshold of £85,000, who will be required to keep digital records for VAT purposes from April 2019.
Why is Making Tax Digital being introduced?
HM Revenue & Customs are introducing MTD for the following reasons:
- Making tax reporting less onerous
- Create greater taxpayer engagement
- Give taxpayers a single picture of all tax liabilities and entitlements in one place
- Give businesses and landlords greater clarity on tax falling due
What could this mean for you?
- It will change the established cycle and methods of tax reporting
- Most businesses and landlords will be required to use online accounting software to report transaction data to HMRC, probably quarterly
- There will be less re-keying of data; HMRC will pre-populate tax accounts with the information they already hold
- The taxpayer (or accountant) will be required to “check, confirm, correct, confess”
When will Making Tax Digital affect me?
2018 HMRC starts MTD pilots
Technical testing of new MTD-compatible software
2019 VAT reporting
VAT reporting as part of MTD becomes mandatory for businesses with turnover above £85,000
2020 Other tax reporting
Earliest date that self-employment, rental income and Corporation Tax reporting becomes mandatory
Help with Making Tax Digital?
Preparing for MTD does not need to be difficult. We can work with you to prepare; we are highly trained and experienced at setting businesses up to maintain their records digitally.
Download our FREE Making tax Digital guide.
The information provided is based on current guidance from HMRC and may be subject to change. Please take advice before taking any action.
Would you like to know more?
Please feel free to get in touch via phone, email or our quick contact form.
We offer initial free consultations simply contact us to find out more.