Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.
HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world. Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is:
- more effective
- more efficient
- easier for taxpayers to get their tax right
What MTD actually means?
HMRC would like all us all to do our taxes digitally, via software, including making payments to them. This scheme is called Making Tax Digital. The first step occurred in April 2019, when MTD for VAT became mandatory for most VAT-registered businesses.
Other types of business tax, such as income tax and corporation tax, will be included in the coming years.
MTD for VAT means businesses must file their VAT returns digitally, via compatible software. For the majority of eligible businesses, it’s no longer possible to file their returns via the VAT portal website, or via paper-based returns.
MTD for VAT also means you must keep accurate, complete and readable VAT records digitally. Therefore, you can no longer keep them as paper-based ledgers.
And even doing so in a spreadsheet can be problematic when it comes to accurate record keeping.
We are ready for Making Tax Digital.
Depending on our client preference we work on major HMRC-recognised VAT software provider such as Quickbooks and Xero