Making Tax Digital

 

Would you like to learn more about the  Making Tax Digital (MTD) scheme introduced by HMRC?

The strategy introduced by HMRC has made the whole process digital; for VAT from April 2019 then income and corporation tax from April 2020.

Most taxpayers struggle with the whole process of tax submission.  This digital project is being introduced to ensure errors and mistakes are minimised.  The team at Shields Associates will take you through how Making Tax Digital will affect you and detail all there is to know!

What is Making Tax Digital?


Making Tax Digital is HMRC’s mission to bring the UK tax system into the digital world.

Making Tax Digital is a change to the British tax system.  It is affecting how businesses, individuals and other organisations keep their accounting records.  It also changes the way that taxpayers communicate and carry out transactions with HMRC.

Why is it being introduced?

There are a number of reasons that HMRC have introduced this scheme.  It is a better way of keeping record of how much tax you owe or how much tax is owed to you as a rebate.  HMRC also want it to:

  • Help to replace paper based bookkeeping practices among businesses and individuals. This is not only beneficial for the environment and the quest to make businesses more conscious of their paper consumption, but it will also enable you to make sure that the information HMRC has on file about your business is completely correct.
  • Reduce the chance of errors due to the immediate nature of the MTD software.
  • Create an easier way of understanding how much tax is owed.
  • Improve communication between HMRC and the business/individual because of web chat and secure messaging.

Who must use the Making Tax Digital system?

  • Making Tax Digital has been compulsory for VAT from April 2019 and for income and corporation tax from April 2020. 
  • It is required for businesses with a taxable turnover above the VAT threshold to maintain their records digitally, using MTD compatible software to submit their VAT returns. For businesses below the VAT threshold MTD is available on a voluntary basis.

The information that needs to be submitted remains the same.

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