What is Making Tax Digital (MTD)?
Making Tax Digital (MTD) is an HMRC initiative that will update the UK tax system for the digital age and make tax administration more effective, efficient and easier for taxpayers. This will be achieved by the implementation of a fully digitalised tax system by 2020, whilst also reducing HMRC’s overheads for managing tax affairs and ultimately bring an end to self-assessment.
The changes will apply to the majority of business owners, self-employed professionals and landlords. It will require business owners to maintain digital records and make regular submissions to HMRC.
What is the timeline for Making Tax Digital?
Making Tax Digital will begin rolling out from April 2019 for all businesses with a turnover above the VAT threshold (£85,000 per year). By April 2020, it will also become mandatory for Income and Corporation Tax reporting for those above the VAT threshold.
Businesses (including landlords) with a turnover below the VAT registration threshold will have the option to register for VAT from April 2019 and Income Corporation Tax from April 2020. The intention is that in the following years, this is rolled out to all businesses and individuals.
What do you need to do?
As a client of Clever Accounts, our intention is that you will see very little difference to your current service. We are working hard with our software providers to implement changes that will minimise any additional requirements and keep you compliant with the changes to the tax system.
If you are not currently a client with Clever Accounts and worried about the additional requirements, please get in touch and our team will explain the benefits of digital record keeping and how our service can benefit you and your business.