As technology advances, so does accounting. Making Tax Digital (MTD) is now changing the way you will file your returns. The first stage of the transition to digital tax filing has already come into effect, with future transformations beginning their rollout.
The best thing you can do is to get ahead of it and start your preparations.
For you as a business owner, this means changes in the way you and your accountant manage your taxes – but this doesn’t have to be a bad thing.
In this blog, we will discuss what MTD means for you.
Larger firms have already been dealing with MTD since April 2019, but smaller businesses were given a later deadline. As of 1 April 2022, all VAT-registered companies need to use MTD-compatible software to file their VAT returns.
This will then extend to self-employed individuals and landlords with an annual turnover of £10,000 as they will need to comply with MTD for Income Tax from April 2024.
Beyond this, there are plans to roll out MTD for corporation tax. These have not been finalised yet, but the Government says a pilot scheme will be launched ahead of time and the scheme won’t become mandatory until April 2026.
What this means for you
As accountants, our job is to keep your best interests at heart as well as make sure you comply with tax and VAT guidelines laid out by HMRC. Getting you prepared for MTD is now going to be part of our service.
The first thing we will do is provide practical advice on the digital processes and help you work out how to navigate the compatible software. There is a wide range of MTD-compatible software which can be found here.
You’ll need to ensure that your returns are uploaded more regularly. If you’re worried about this, we’re on hand to help – or to take the task off your hands altogether.
Don’t worry, though; the rollout of MTD is aimed to make things easier for you by removing the complications that can arise with more manual annual returns.
What you can do to get ready
Preparation is key to success, and MTD is no exception.
The best place to start is by getting yourself ready for all of the changes. This means getting clued up for the new deadlines and making sure you are familiar with MTD-compatible software.
You’ll need to make sure you are signed up for MTD for VAT ahead of the rollout.
We’ll make sure you are ready to go and know all of this new information – at the end of the day, we want to provide you with peace of mind. By keeping up with regular submissions, we’ll give you more breathing space and make sure your accounts are in better order.
Get in touch
At Blue Shore, we’re here to help you with any queries you have about the changes to tax recording and reporting that MTD will bring.