Making Tax Digital (MTD) for VAT started on 1 April 2019, affecting VAT-registered businesses with a taxable turnover above the VAT threshold of £85,000.
The primary legislation for Making Tax Digital relating to VAT and Income Tax is contained in the Finance (No. 2) Act 2017 and provides certainty about the broad framework in which Making Tax Digital will operate, with secondary legislation for VAT laid in February 2018, which came into force from April 2019.
Then from 1 April 2022, Making Tax Digital came in for all VAT-registered businesses.
In our latest publication, we talk about what MTD means to sole trader businesses and landlords.
Changes from 2024/25
From 2024/25, all sole trader businesses and landlords will need to keep their business records in a digital format and submit quarterly reports to HMRC using MTD-compatible software. Although the annual self-assessment tax return is being abolished, the new regime will involve more frequent reporting obligations than the old one.
These submissions will be in addition to those already being made by VAT-registered businesses under MTD. Partnerships will start coming within MTD from 2025/26.
It is important to understand how these changes will impact your business.
In our latest newsletter, we summarise what Making Tax Digital (MTD) is and why it is important. We look at when MTD reporting applies and what you will need to do. We delve into MTD for VAT and what it means for Income Tax Self-Assessment. Very importantly we look at what the penalties are for non-compliance.
Read our special MTD publication here
Next steps
The first step towards complying with MTD will be to get all your accounting records into a digital format if they are not already. You may need to buy (or upgrade existing) computer systems and consider what sort of software will be required.
How can we help you?
We can help you with the initial transition to digital records and set up the software to submit reports to HMRC. Alternatively, we can help you transfer your accounting data to us so that we can submit MTD reports on your behalf. Please do contact us on 01444 716946 or on 01273 963656 or alternatively email us.
