Making Tax Digital is a scheme introduced by the HMRC to make tax administration and collection easier, more efficient and more accurate to avoid discrepencies in tax collection. The first MTD deadline has passed and millions of businesses have signed up to the scheme, improving tax collection and administration nationwide.
If you’re a business, self-employed or a landlord, MTD applies to you, requiring you to switch to digital tax administration using an MTD-compatible software such as Xero and QuickBooks (Intuit). For a full list of MTD-compatible software for VAT and Income Tax, visit the GOV website.
The deadlines:
- 1st April 2019 – If your business has a taxable turnover over £85,000 and is not in the deferral group, your business must have started using a compatible software to keep digital VAT records. It is a legal requirement to have signed up to the scheme if this applies to you. If you haven’t sign up, speak to one of our Accountants as soon as possible by calling 01392 875391.
- 1st October 2019 – If your taxable turnover is over £85,000 and you are a trust or not for profit organisation, local authority, public corporation, trader based overseas, or are part of a VAT group, then this is the next deadline for signing up to MTD. For a full list of the criteria, visit the GOV website.
If your taxable turnover is less than £85,000, you can sign up to MTD voluntarily or for MTD for Income Tax. This is useful for keeping records and tracking income and expenses on all of your devices.
Due to the fast pace of the change, the government announced that MTD only applies to VAT and will not be applied to other taxes until at least April 2020. Similarly, new businesses will also not have to apply MTD until 2020. If you’re a new business and want to get started early, give us a call on 01392 875391.