Making Tax Digital
Making Tax Digital (MTD) is the HMRC initiative to get everyone reporting digitally. The four foundations are:
Better use of information
HMRC will use information from third parties, such as employers, banks and other government departments so that individuals will not have to supply information themselves.
Tax in real time
HMRC will obtain and process information affecting tax as close to real time as possible, so that individuals and businesses no longer have to wait until after the end of the tax year to know how much tax they have to pay.
A single financial account
Taxpayers can now see a comprehensive picture in their digital account with all their tax information in one place.
Interacting digitally with customers
Customers (and agents) will be able to interact with HMRC digitally at a time to suit them.
New Deadlines for MTD
Information is correct as of November 2023 but subject to change.
To keep up to date with any future changes, double check for any amendments on the Gov.UK website
Making Tax Digital for VAT
Making Tax Digital for VAT registered businesses for businesses above the VAT threshold of £85,000 has been compulsory since 2019.
However, as of November 2022, all VAT-registered businesses must comply with Making Tax Digital (MTD) and submit returns using MTD-compatible software. Therefore, if you have registered voluntarily for VAT as you are under the £85,000 threshold, you will need to comply with the new rules.
For further information see Making Tax Digital for VAT registered businesses
Making Tax Digital for Income Tax
Whilst this was supposed to be introduced in 2023 the government announced on 23 September 2021 that there would be at least a 12 month delay and on Monday 19th December 2022 that a further delay of 2 years would be put in place. This means that from 6 April 2026, ALL self-employed businesses and landlords with annual business or property income above £50,000 will need to follow new Making Tax Digital rules from their next accounting period starting on or after 6 April 2026.
This will represent a huge change for most businesses across the UK who currently have no formal records at all and get everything sorted once a year at the year end.
How Maynard Johns can help …
If your current bookkeeping method does not allow you to submit directly to HMRC through compatible software you need to start preparing. We have many solutions to help you.
Visit us in our Bideford office or give us a call!
Telephone 01237 472071