Making Tax Digital Explained
What is Making Tax Digital?
Making Tax Digital (MTD) is an HMRC initiative designed to make sure the UK tax system is effective, efficient and easier for taxpayers.
In simple terms, you will have to keep digital records and submit VAT returns using compatible software such as Sage, Xero or Quickbooks.
Does this affect my business?
If you are a VAT registered business above this £85K threshold, then yes it does.
Is it compulsory?
Yes but it is only applicable to VAT initially and then will roll out to other areas such as income tax and corporation tax in 2020.
Are the tax rules changing?
There are no changes to the tax rules, they will remain the same. This initiative only applies to how you submit VAT records.
When does It start?
Making Tax Digital for business (MTDfb) begins on 1 April 2019 with MTD for VAT. From that date, you will have to keep digital records and submit VAT returns using compatible software.
What do I need to do?
If you are an existing client of ours, don’t worry. There are no actions you need to take and we will be in touch in due course.
If you are not a client and you think you need some help, then please get in touch and we’ll be happy to advise accordingly.
