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New and Upcoming MTD Requirements for Businesses
New and Upcoming MTD Requirements for Businesses

 

Making Tax Digital is part of the UK Government’s plans to make it simpler for businesses to get their tax correct, while also keeping on top of their affairs.

The policy makes fundamental changes to the way the tax system operates, transforming tax administration into a more effective and efficient procedure for taxpayers.

VAT-registered businesses with a taxable turnover above £85,000 have been required to follow the Making Tax Digital rules for some time now, by keeping digital records and using software to submit their VAT returns.

However, for their first tax return starting on or after April 2022, VAT-registered businesses with a taxable turnover below £85,000 will now be required to abide by these rules as well.

 

 

Income Tax

 

Self-employed businesses and landlords with annual business or property income above £10,000 will need to follow the rules for MTD for Income Tax from their next accounting period starting on or after 6 April 2023.

 

 

Corporation Tax

 

The government plans to provide businesses with an opportunity to take part in a pilot scheme for Making Tax Digital for Corporation Tax, but will not be enforcing its usage before 2026.

 

 

The Beauty of MTD

 

The immense accuracy that digital records provide, along with the assistance built into cloud accounting software will dramatically reduce the amount of tax lost to avoidable errors. The primary reason for this is that information is sent directly to HMRC from your digital records, entirely traversing the possibility of transportation errors.

 

 

Other Useful Information

 

Gow and Partners offer bespoke, simple-to-use cloud accounting packages, in collaboration with Xero and QuickBooks, so do take a moment to read up on what we offer.

To help you get your head around the specific requirements of MTD, you can refer to our previous blog post on Mandatory Digital Links.

If you are interested in a more in-depth review of the MTD policy as a whole, the government has published a comprehensive evaluation of the introduction of the Making Tax Digital programme, which contains all of the useful research to date.

 

 

Contact Gow & Partners

 

Need a knowledgeable, dedicated and honest team to take care of all your accounting needs, with no delays or hidden costs? Simply call 01254 589799 today! Alternatively, you can fill in a contact form, or send us an email at info@gowandpartners.co.uk.