Making Tax Digital
What Is Making Tax Digital?
Making Tax Digital is an HMRC initiative for streamlining the UK tax system and began in April 2019. From that date, businesses which are VAT registered have had to submit their VAT returns using HMRC recognised and compatible software. The Government confirmed in July that Making Tax Digital would be extended to include all VAT registered businesses from April 2022 and for income tax from April 2023.
VAT returns can no longer be submitted by logging onto the HMRC Website. If you are unsure of what you need to do next in order to be compliant please get in touch, we can help with either a quick review of your existing software and processes or help in setting up new systems to make sure you are ready.
For a complete overview, you can also visit HMRC: VAT record keeping – GOV.UK (www.gov.uk)
and for changes effective from April 2023: Follow the rules for Making Tax Digital for Income Tax – GOV.UK (www.gov.uk)
Key Dates for the roll out of Making Tax Digital
- From April 2022 – the voluntarily VAT-registered (VAT-able turnover below £85K) will be required to move to keeping digital VAT records and submit VAT returns using MTD-compliant software.
- From the first day of their annual accounting period starting in the 2023/24 tax year, income tax requirements will apply to the self-employed with annual turnover above £10K.