The Treasury has announced plans to extend the Making Tax Digital (MTD) initiative to more businesses and individuals ….
HMRCs ambition is to bring the UK’s tax system into the 21st century by transforming the administration of our taxes to make it more efficient, more effective and easier for taxpayers to get it right.
At present, businesses above the VAT threshold of £85,000 are required to comply with MTD by keeping digital records and using compatible software to submit their VAT Returns. If your taxable turnover is below £85,000, you can join Making Tax Digital voluntarily but for VAT returns starting on/after April 2022, digital reporting will be made compulsory for all businesses registered for VAT – irrespective of your level of turnover.
From 6 April 2023, the Making Tax Digital programme will be extended to include all taxpayers who file self-assessment tax returns to report their self-employed business income and/or property income in excess of £10,000 per year.
There are also plans to consult, this Autumn, on how MTD can be extended to include Corporation Tax. We’ll expect to hear more in the Autumn budget.
MTD does make it easier for businesses to keep on top of their financial position, it won’t increase your tax bill; the procedure for reporting and collecting taxes will be different. Fortunately, we’ve got around eighteen months to plan for digtial reporting.
If you would like to understand more about digital accounting for your business, call Chloe or Vicky in our business services team on 01223 810100.