What Is ‘Making Tax Digital’ (MTD)?
Making Tax Digital—or MTD for short—is a government initiative that will revolutionise the UK tax system and bring an end to self-assessment from April 2018.
HMRC’s main aim of Making Tax Digital is to make tax administration more effective, efficient through the implementation of a fully digitalised tax system by 2020, whilst also reducing its overheads for managing tax affairs.
The changes apply to a wide range of taxpayers, including most businesses, self-employed professionals and landlords. This new tax system will require the majority of business owners to maintain digital records using compatible software and we at DND Accountancy Services will be here to help you with this every step of the way.
Dates and Exemptions
The dates for the introduction of their plans are:
Businesses, self-employed people and landlords will be required to start using the new digital service from:
- April 2018 if they have profits chargeable to Income Tax and pay Class 4 National Insurance contributions (NICs) and their turnovers are in excess of the VAT threshold
- April 2019 if they have profits chargeable to Income Tax and pay Class 4 NICs and their turnovers are below the VAT threshold
- April 2019 if they are registered for and pay VAT
- from April 2020 if they pay Corporation Tax (CT)
All self-employed businesses and landlords with a turnover of under £10,000 a year will not have to adhere to MTD unless they choose to do so.
Individuals who are employed and pensioners will also be exempt unless they have a secondary income of over £10,000 a year from self-employment or property.
Software and Reporting
Businesses eligible will need to send summary data on a quarterly basis in a digital format.
If you currently submit three line accounts, you will still be able to do this however you will need to do this quarterly.
DnD Accountancy Services are monitoring the progress of the Making Tax Digital plans, we are here to make the process as seamless as possible and will be here to help though this change.
Please call us on 01229 808173 or email firstname.lastname@example.org