MAKING TAX DIGITAL WITH M J SMITH
Making Tax Digital for VAT is here and we at M J Smith & Co successfully implemented this in April 2019.
We use the latest accountancy software including Xero and Quickbooks and other cloud-based technologies as well as in-house systems to link directly with HMRC for seamless accounting integration.
Making Tax Digital for businesses is coming – Who is likely to be affected?
Businesses, self-employed people and landlords will be required to start using the new digital service from:
April 2021: End of soft landing period:
For VAT periods beginning on or after 1 April 2021, businesses will need to maintain all accounting records digitally within “functional compatible software”.
April 2022: MTD for VAT phase two:
All VAT-registered businesses need to submit their VAT returns in line with Making Tax Digital.
April 2023: MTD for Income Tax Self Assessment:
Landlords and self-employed businesses with annual business or property income above £10,000 must register for Making Tax Digital for Income Tax Self Assessment (MTD for ITSA).
April 2026: MTD for Corporation Tax:
Incorporated businesses and other organisations within the charge to Corporation Tax may need to comply with Making Tax Digital.
Businesses, self-employed people and landlords with turnovers under £10,000 are exempt from these requirements.
General description of the measure
The government recognises that the majority of businesses want to get their tax right. The latest tax gap figures published by HMRC show that too many otherwise compliant businesses find this hard, even some who use an agent to help them. As a result over £8 billion, a year in tax is lost from avoidable taxpayer errors.
This costs the public purse, it causes businesses cost, uncertainty and worry when HMRC is forced to intervene to put things right.
HMRC wants to do more to help businesses get their tax right and these changes are a very important step in that direction.
It will help businesses steer clear of avoidable errors, giving them a clearer view of their tax position in a year.
Businesses (including self-employed and landlords) will be able to keep records of their income and expenditure digitally. This will allow for sending summary updates quarterly to HMRC from their software (or app).
Those who genuinely cannot get online due to their individual circumstances such as disability, geographical location, or other reasons, will be exempt from these obligations.
Call us on 01392 875391
Email us at enquiries@mjsmith.co.uk
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