Making Tax Digital (MTD) is HMRC’s undertaking to bring the UK’s taxation system into the digital age. This has already started with the implementation of the Personal Tax Account and real time changes to PAYE tax codes for those in employment.
Essentially the next step on the MTD journey requires businesses and landlords to keep their record in an electronic format and to make quarterly returns of real time accounts information.
It has recently been confirmed that the ambitious timescale originally set out has been delayed. We believe that this is a positive move as there was the danger that the changes being rushed through could easily end in disaster. The businesses first being mandatorily brought in to the new regime, from April 2019, are sensibly those that are already used to making quarterly reports to HMRC, namely those businesses which are registered for VAT. However these businesses may not as yet be keeping their records in an electronic format.
All other businesses have a revised starting date from April 2020 which gives them time to find and test the correct solution for them so that the new requirements can be met.
We believe that the best way forward for many of our clients is to adopt a cloud accounting system, the benefits of which extend far beyond meeting the needs of the new taxation system. Speak to us for more details.
Our latest Making Tax Digital Newsletters can be found below –
Issue 1 – Making Tax Digital… are you prepared?