Making Tax Digital – Next Steps
Making Tax Digital (MTD) for VAT was launched in April 2019. Hundreds of thousands of VAT-registered businesses above the VAT threshold (£85,000) are now recording and reporting their affairs digitally to HM Revenue & Customs (HMRC).
The rollout of MTD for VAT will now continue with all businesses below the VAT threshold required to report and record their VAT information quarterly using HMRC approved software solutions from April 2022.
Below are the key dates for Making Tax Digital, to help you track your journey and ensure you are compliant with the changes ahead.
We know there is a lot to consider in the coming years, which is why our team have prepared a helpful guide, which has information on the various stages of Making Tax Digital and what you may need to report.
MTD for Income Tax
Originally, other forms of taxation, such as Income Tax and Corporation Tax, were meant to follow on from the requirements for VAT April 2020 at the earliest.
However, the Government has now delayed MTD for Income Tax Self-Assessment until April 2024 at the earliest for the self-employed and landlords with gross property or business income of £10,000 or more.
General partnerships will also be required to follow these rules from April 2025, following by other partnerships at a date that is yet to be confirmed.
These obligations begin with effect from the start of the first accounting period beginning after 5 April of the year in which MTD for Income Tax becomes mandatory.
In relation to Corporation Tax not much has been revealed yet by the Government, but it is expected to be introduced once MTD for Income Tax has been rolled out.
Time to prepare
This new process will require a far larger number of businesses, including those below the VAT threshold, to report their affairs digitally on a quarterly basis, this includes sole traders with income from one or more business, as well as income from letting UK and overseas property.
HMRC are currently in the process of testing MTD for Income Tax and is undertaking pilot schemes in the years running up to its implementation.
Although, the date at which full implementation of MTD has been delayed, it is imperative that businesses and individuals start to review their systems and processes to ensure they are ready for this landmark shift in taxation.
If you would like help preparing for MTD or are struggling with the complexities of the current VAT regime, please contact email@example.com or call 01423 566086.