Making Tax Digital
Ok so yes, we are being ironic. No one could call taxes heaven, except maybe clients who have handed their tax headaches to their accountant! And why wouldn't you? Why would you want to stay on hold for hours before getting through to someone who may have little sympathy for you or your circumstances? And now we all have MTD (Making Tax Digital) to deal with as well. Ok, so we are being slightly hard on HMRC, but the fact remains, the track record of HMRC implementing new systems is not good. So, when you have read on and see the plans HMRC has for making tax digital, don't worry and lose sleep over it. Give us a call for your free initial consultation and see how we can take this burden from you.
What is Making Tax Digital (MTD)?
HMRC's MTD plans are getting small businesses and the self-employed to complete digital tax records and returns, with the aim of going completely paperless eventually.
HMRC says that MTD is how they’re delivering on making it "easier for individuals and businesses to get their tax right and keep on top of their affairs.”
HMRC already introduced the personal tax account in 2015, which is a digital tax account that aims to make it easier for people to manage their tax affairs.
Next was the first phase of MTD in 2019 – Making Tax Digital for VAT. This involves keeping digital records and using accounting software to complete VAT tax returns.
Eventually, keeping paper records won't meet the requirements of tax legislation.
April 2022: MTD will be compulsory for businesses with a turnover below the £85,000 VAT threshold
April 2023: MTD will apply to taxpayers who file Income Tax Self Assessments for business or property income of more than £10,000 a year
If you have any queries on the above or would like to find out more, give our friendly team a call. We'll be happy to help.