Making Tax Digital (MTD) – Is a key part to HMRC’s plan to make it easier for sole traders and business alike to get their tax right. HMRC aim to become one of the most digitally advanced tax administrations in the world.
If you are VAT registered and have a taxable turnover above the VAT threshold you are required to keep your records digitally using the MTD system and use software to submit their VAT returns from April 2019.
Some people are already testing out this new software, keeping digital records and providing income Tax updates to HMRC as part of a pilot to test MTD for Income Tax.
A major reason for this change is to try to prevent the easy mistakes that are made by businesses while trying to get their Tax right. These mistakes have been claimed to cost the Exchequer over £9 billion a year, this sum is to be majorly reduced when using MTD as people will hopefully avoid these simple mistakes. As all of this may seem confusing HMRC have decided to slow the introduction of MTD and stated that ‘MTD will not be mandated for taxes other than VAT until at least April 2020.’
You can find more information about MTD on HMRC’s website. Alternatively, if you have any questions about MTD you can contact us Mon-Fri 9am-5pm and someone will be happy to answer your questions or arrange a meeting to show you how it works in person.
Quote from Nigel Holland:
“HMRC are introducing major changes to how tax is submitted with making tax digital which could make submitting tax much easier for people in future. Don’t forget, at Holland & Co we are always keeping up to date with the latest changes to anything and everything accounting. So, if you need any expert knowledge on all the up and coming changes make sure to contact us we’ll be happy to help.”