Making Tax Digital is HMRC's vision to digitise the UK tax system and is likely to affect all businesses and individuals submitting tax returns in someway over the coming years. At a simple level this means that financial records will need to be held digitally and submissions to HMRC will need to be completed using MTD approved software. The MTD project provides an opportunity for all taxpayers to streamline their processes and subsequently reduce obvious errors, improve record keeping and reducing administration time.
From April 2019 VAT reporting by all VAT registered businesses and organisations (including sole traders, partnerships, limited companies, non-UK businesses registered for UK VAT, trusts and charities) were required to comply with the new regulations. It is estimated that over 85% of businesses in scope have successfully signed up and are already seeing the benefits of doing so.
Where taxable turnover for a self-employed business and/or property income business exceed £10,000 per annum, individuals must start preparing returns after April 6th, 2023 using the new MTD regime. A pilot service will be going live from April 2021 to allow businesses and landlords sufficient time to test end to end processes.
While minimal concrete plans are in place for the Corporation Tax chapter of Making Tax Digital, HMRC are keen to follow similar principals as those for VAT & income tax however latest guidance indicates HMRC will be looking to consult with business in the Autumn/Winter of 2020.
We have a range of options available to keep you compliant and assist with a system implementation. Why not get in touch for an informal chat?
