Why choose us
Making Tax Digital (MTD) is part of the government’s plan to make it easier for businesses to stay on top of their day-to-day accounts. Making Tax Digital (MTD) has been introduced by HMRC to help individuals and businesses to get their tax right, leaving spreadsheets and paper records in the past. HMRC wants to be one of the most digitally advanced tax administrations in the world – improving efficiency, effectiveness and ease of compliance. The plans signal the end of paper accounting for millions across Britain, moving over to a new, improved system of tax.
In April 2019, legislation was changed to require businesses above the VAT threshold to set up a digital tax account and file quarterly returns online. MTD was introduced for nearly all VAT-registered businesses with a taxable turnover above £85,000 during this time. They have to use Making Tax Digital software to keep digital records and make VAT submissions to HMRC. With businesses and accountants moving online to improve efficiency and boost profitability, this in turn has made the transition to MTD painless.
From April 2022, this has been extended to all VAT-registered businesses in the UK.
At the moment, Making Tax Digital is all about VAT submissions. But over the coming months and years it will include Income Tax and Corporation Tax too.
- April 2022 – MTD for VAT
VAT-registered businesses must use recognised software to keep digital records and submit VAT to HMRC.
- April 2024 – MTD for Income Tax Self-Assessment
MTD for Income Tax Self-Assessment will apply for all self-employed business owners and landlords with annual income over £10,000.
- April 2025 – MTD for Income Tax Self-Assessment
MTD for Income Tax Self-Assessment will apply for general partnerships with an annual turnover of over £10,000.
- April 2026 – MTD for Corporation Tax
Making Tax Digital for Corporation Tax to be introduced at the earliest.
Communications with HMRC will become automated, making it crucial to maintain up-to-date accounts. To comply with Making Tax Digital for VAT, businesses must keep digital records. This must be done using what HMRC calls ‘compatible software’. In other words, it must be able to connect directly to HMRC and send your details to them using digital links.
Tax summaries will need to be submitted at least quarterly through software – giving HMRC an accurate view of accounts. With everything done digitally, documents and numbers are kept in the right place at all times. If you’re VAT-registered, you’ll now need to use Making Tax Digital software to keep digital records and make submissions to HMRC. If Vat registered the VAT submissions are made in addition to the MTD Income Tax submissions. Now is the time to get ahead with ourselves at Makinson & Co. Do not hesitate to get in touch with us today if you are in need of assistance with your businesses MTD requirements.
Clients of Makinson & Co can benefit from a discounted price on MTD compliant software, paying significantly less than the current rates – £12 per month (Start) to £26 per month (Standard) and £33 per month (Plus).
If you’d like to know more about making tax digital, contact Makinson & Co serving clients across Lydney.
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