Making Tax Digital (M.T.D)
According to HM Revenue & Customs ‘Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs’.
Their ambition is to become one of the most digitally advanced tax administrations in the world. Whilst also, it has to be said, narrow the ‘tax gap’ believed to exist by making the capture of data digitally and using 3rd party software to avoid data capture errors and misstatements.
Making Tax Digital aims to make fundamental changes to the way the tax system works – transforming tax administration so that it is:
easier for taxpayers to get their tax right
After some delays the first step forward in this ambition is the introduction of Making Tax Digital for VAT.VAT-registered businesses with a taxable turnover above the VAT threshold (currently £85,000 p.a.), from the first VAT return starting on or after the 1st April 2019, are now required to use the Making Tax Digital service to keep records digitally and use software to submit their VAT returns
Due to concerns raised by a number of small businesses about the pace of change, especially with the as yet unknown implications of BREXIT, the government announced that the pace of mandation would be slowed and that Making Tax Digital will not be mandated for taxes other than VAT until at least April 2020.
If this is something you will have to deal with either during 2019 or want to understand more about how it will affect you and your business in subsequent years’ please do make contact.