“Making Tax Digital”
A key part to the government’s plan to make it easier for businesses and individuals to get their tax right and to keep on top of its affairs, is Making Tax Digital (see gov overview). This is a scheme that will require online tax filing, payments and digital record keeping.
Making Tax Digital is going to fundamentally change the way the tax system is operated.
Although the scheme is only currently for VAT with a roll-out date of April 2019, the rest is due to follow in 2020 at the earliest.
Making Tax Digital for VAT
This comes in for VAT registered businesses over the VAT turnover threshold of £85,000 from April 2019. These businesses will be required to maintain their accounting records digitally.
Paper records will cease to meet legal requirements. HMRC’s online VAT return will remain available only to businesses not within the scope of MTD for VAT. MTD for VAT may be extended to all VAT registered businesses in the future but no earlier than 2020.
Click here for further information.
Making Tax Digital for Income Tax
MTD for income tax is expected from April 2020 at the earliest.
Business falling into the scope of MTD will then also need to maintain digital accounting records and submit information quarterly to HMRC using digital software.
Catherine Bennett Accountancy
Wheal Harmony House
With “making tax digital” there are a number of software packages available to help with the process. Our preferred provider is FreeAgent, although, we are happy you work with any package that works for you.
We can review the package before you commit to ensure it will meet yours and HMRCs requirements. Please contact us about any software you are intending to use as we may be able to offer discounts