Making Tax Digital – All you need to know
Making Tax Digital (MTD) is a HMRC initiative that will transform the UK tax system and eventually bring an end to self-assessment.
The aim of the MTD initiative is to make tax administration more effective, efficient and easier for taxpayers, by fully digitalising the tax system by 2020. It means that a wide range of taxpayers, including most businesses, self-employed professionals and landlords will be required to submit their tax information to compatible software, such as Xero or Sage to maintain digital records and register with HMRC to provide the information.
MTD is set to be mandatory for VAT by April 2020, and MTD for income tax is being launched as a voluntary pilot, meaning that self-employed businesses and landlords can voluntarily use software to keep their business records digitally and send Income Tax updates to HMRC, instead of filing a Self-Assessment tax return.
From April 2019, quarterly reporting is:
- Mandatory for VAT for all VAT-registered businesses with a turnover above the VAT registration threshold (£85,000)
- Optional for VAT-registered businesses with a turnover below the VAT registration threshold (£85,000)
From April 2020 (at the earliest), quarterly reporting is:
- Mandatory for income tax and corporate tax (as appropriate) for all businesses (including landlords) with a turnover over the VAT registration threshold (£85,000)
- Optional for businesses (including landlords) with a turnover below the VAT registration threshold (£85,000)
The Next Steps
You can sign up for MTD for VAT using the gov.uk website by clicking here. You’ll need to sign up using the Government Gateway user ID and password you got when you signed up to the Self-Assessment online service.
At Breslins, our accountancy team are experienced in a range of accounting systems, include SAGE and Xero. Our specialist team of accountants are also trained tax advisers and can offer you an efficient tax return and tax planning service, which ensures you meet your tax compliance requirements and that your business is compliant with the new Making Tax Digital initiative.
Get in touch today at 0121 233 0456 or email firstname.lastname@example.org if you require help or advice with the MTD initiative and we’ll be more than happy to help!