Making Tax Digital (known as MTD) is the biggest shake up of the way everyone (including businesses) will need to start reporting to HMRC.
MTD is being introduced over the coming years but kicked off in April 2019 with MTD for VAT - which is now live.
HMRC's plan is to follow this with MTD for Income tax and then MTD for Corporation Tax over the next couple of years.
In essence, MTD means recording all your activity electronically, then reporting it to HMRC more regularly and electronically. The days of keeping paper and completing HMRC forms manually are soon to disappear.
We have been following the MTD journey since the start and are already set for our Clients to be MTD compliant. We do it all for them!
Since 1 April 2019, the vast majority of VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) have been required to keep their VAT business records digitally and submit their VAT returns using MTD-compatible software.
We have ensured all our Clients are compatible and we submit their VAT returns for them using HMRC approved software
When it is introduced (thought to be after 2020) businesses and landlords who join MTD for Income Tax will need to send quarterly summaries of their income and expenses to HMRC using MTD-compatible software.
In response they will receive an estimated tax calculation based on the information provided to help them budget for their tax.
Similar to MTD for Income Tax, Ltd Companies will be required to ensure they are also MTD compliant.
We continue to follow the MTD story and keep our Clients up to date on it!