Preparing Your Business for Making Tax Digital

Making Tax Digital (MTD) is at the core of HMRC’s plan to become one of the most digitally advanced tax administrations in the world, by replacing existing processes with digital record keeping and submitting tax returns digitally throughout the year.

Do Making Tax Digital (MTD) rules affect me?

You’ll need to be aware of the MTD rules if you:

• Are a VAT-registered business
• Submit a Self Assessment tax return to report sole trader or landlord income

To help businesses adjust to the changes, the new rules are launching in stages for different types of tax return.

When will MTD rules apply to me?

The new Making Tax Digital legislation comes into force in stages depending on the type of tax return it relates to. Our table below shows the planned schedule for MTD.

Will I need special software for MTD?

You’ll need to keep your accounting records digitally, and submit your tax information to HMRC using special software (like Pandle!). You’ll either be able to submit directly from your record-keeping software, or will need to use bridging software to make the actual submission.

What are the benefits of Making Tax Digital?

The government believes that MTD will make life easier for businesses and HMRC, improving efficiency, and making it easier to comply. Other predicted benefits include:

• The ability to review all your tax information from your personal digital tax account
• Faster and simpler to submit your information to HMRC and pay your tax bill online
• Increased accuracy and fewer errors in reporting, meaning you’re more likely to only pay what you owe, and are less likely to experience compliance checks and audits
• A more up-to-date picture of your finances and the tax you owe

Don’t ignore MTD until it becomes compulsory! Talk to one of the team about our online accounting services, including help with your tax return. Call 020 3355 4047 or get an instant online quote.