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What is Making Tax Digital?

MTD (Making Tax Digital) is an initiative by HMRC which aims to revolutionise the UK tax system and close off the self-assessment process.

What is Making Tax Digital?

In December 2015, HMRC produced its Making Tax Digital plan, outlining the objectives for the future of the tax system UK. The initial aims for the first phase of MTD are for businesses and sole traders to conduct digital record-keeping; providing a single, seamless digital process with minimal manual manipulation of financial data and for the VAT returns to be sent from software used to store records via an Application Programming Interface (API).

With MTD in place, the government aims to make tax administration more effective, efficient and easier for taxpayers. The objective is for a fully digitalised and paperless tax system by 2020, and at the same time reduce HMRC’s overheads for managing tax affairs.

When will MTD begin?

The first phase will affect companies and businesses who are VAT registered with an income over £85,000.

The MTD for VAT deadline was previously pushed back from July 2017, with the new implementation now scheduled for 1 April 2019. A year later, companies with income between £10,000 and £85,000 will follow suit. All other taxes will be April 2020 at the earliest. Companies will also be expected to submit VAT returns using MTD compliant software.

Who will be affected by MTD – does it apply to my business?

Regardless of the location in the UK, business size, number of employees etc., it is highly advised that business who have not begun processing digital accounts and record-keeping  do so now to ensure they have time to smooth out the onboarding process. Businesses need to prepare to be compliant by 1 April.

What should I be doing now ahead of MTD?

Ask your current accountant what they can do to support you towards becoming Making Tax Digital compliant. Alternatively, contact one of our specialists who would be happy to explain our digital offering to make sure you and your business is ready for the first phase.

Contact us to arrange a exploratory chat about Making Tax Digital and how we can help you and your business be compliant before 1 April 2019

020 3301 7474

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