Making tax digital
Making tax digital
Many are seeing Making Tax Digital (MTD) as a huge headache. We can’t quite understand why! MTD gives you the opportunity (or that little push) towards digitising your accounts function. This, if done correctly, can aid you in key business decisions and help with becoming a forward-thinking business ultimately making key decisions easier and more effective.
So, what is it? The bottom line is that this is HM Revenue and Customs move towards becoming a world leading, digital tax authority. Transforming tax administration to make it more effective, more efficient and easier to get right!
The starting point will be with VAT and takes effect from 01 April 2019. It will apply to VAT registered business with a turnover above £85,000 (the VAT registration threshold). The big change is that you will have to submit your VAT details to HMRC through software. Manual submissions will no longer be accepted. This will later be followed by income and corporation tax but not until after April 2020.
The key is to be organised and open to the benefits. Easy, with our support.
The government’s Making Tax Digital (MTD) programme is intended to move the UK towards a fully digital tax system, which is planned to allow taxpayers to easily keep digital records and report their tax liabilities and payments in real time.
From April 2024, therefore, individuals with business and rental income over £10,000 per annum will need to make quarterly reports under MTD for income tax. This will include many sole traders and landlords.
Under MTD it is proposed that the Self Assessment tax return will be replaced by five new reporting obligations made during and after the tax year. There will be quarterly updates required and a year-end final declaration.
With this in mind now is the time to start moving to digital records, giving a chance to become comfortable with this sort of system and ensure it is implemented and functioning correctly intime for MTD.
Richard Tarbatt
Since engaging Elm Financial to aid us in our payroll, bookkeeping, management reporting and year end accounts we have taken huge relief in knowing that everything is up-to-date and accurate. It is a relief not to have the worry of dealing with HMRC and all the reporting requirements as this is all handled by Elm Financial. They are very responsive to our questions and always on hand to help. We would recommend them highly.
