Back in 2019, HMRC introduced the first phase of its new initiative, which is Making Tax Digital (MTD). HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world with this initiative.
What is MTD ?
Making Tax Digital is a key part of the government’s plan to make it easier for individuals and businesses to get their tax right and keep on top of their affairs. The aim is to become more effective, efficient and easier for taxpayers to get their tax right and to go totally paperless in the long term.
In the future, businesses will have to move to a completely digital tax system, setting out a vision of the end of the tax return and a transformed tax system. The idea is to support business through the transition to digitalisation using software to have a computer trace of the data that is sent to HMRC.
How is the transition happening ?
HMRC has delivered information about who must make the transition towards MTD. Back in 2019, HMRC offered a soft landing saying MTD for VAT was for businesses with a turnover of over £85,000 and in 2020 they made it obligatory for those businesses.
From April 2022, VAT-registered businesses with a taxable turnover below £85,000 will be required to follow Making Tax digital rules for their first return. And then from April 2024, Self-employed businesses and landlords with annual business or property income above £10,000 will need to follow the rules for Making Tax Digital for income tax.
At Godwin Business Services, we understand that although HMRC’s opinion is at MTD will make it easier for the taxpayer but of course it is not that simple. We can help you make the transition as smooth as possible and help you with finding the correct software to file your return. We can also help you by training you to use it in a precise and effective way to not waste time and to get it right. If you wish to, we can also complete the VAT for you. In any case, contact us so we can help you.
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