Making Tax Digital update
HMRC have released a Making Tax Digital (MTD) Update, releasing revised proposed dates for its full implementation. They have released details on their 10 year strategy here.
What is Making Tax Digital?
Making Tax Digital is HMRC initiative to move businesses to keeping digital records and to report their financial information to HMRC once every 3 months.
- From April 2022 – VAT registered Businesses with turnover below £85,000 registration threshold
- From April 2023 – Income Tax Self Assessment for businesses and landlords with income over £10,000.
- Limited Companies – TBC
How may this affect you?
- VAT Registered over £85k Turnover – You should already be filing your VAT returns digitally every 3 months under MTD for VAT, so you should notice very little change. An Additional submission of accounts will likely be required and eventually its very likely tax will be paid quarterly.
- VAT Registered under £85k Turnover – From April 2022 you will be required to keep your records digitally, file to HMRC quarterly and eventually more than likely make tax payments quarterly.
- Income Tax Self Assessment for businesses and landlords with income over £10,000 – you will be required to keep your records digitally, file to HMRC quarterly and eventually more than likely make tax payments quarterly.
What do we advise?
Anyone reading this will have hopefully seen we are already big advocates of Going Digital, for the benefits it can offer you and your business! So with you having to make the change in the future, why not take the plunge now and reap those rewards!?
We will be discussing with our clients over the coming months the options available to them to make this change.
For anyone not currently working with us who are interested in going digital, please do not hesitate to contact us for a free no obligation discussion, or view our cloud accounting page for an overview of various options available here.