April 2019 saw the start of MTD (Making Tax Digital). This was the date from which businesses with taxable turnover of more than £85,000 had to maintain their VAT accounting records digitally in a software product or spreadsheet and file the VAT returns using MTD compatible software.
From April 2022, MTD becomes mandatory for all VAT-registered businesses. From their first VAT period starting on or after 1 April 2022, VAT registered businesses that are not already required to operate MTD, will have to provide their VAT return information to HMRC through Making Tax Digital compatible software.
It may be possible to apply for exemption from MTD, because of your age, disability or any reason why it’s not reasonable or practical. HMRC will consider each application on a case-by-case basis.
More MTD is on the way!!
From April 2024, landlords and unincorporated businesses with total business or property income above £10,000 per year will join MTD for Income Tax. A quarterly summary of business income and expenses will have to be submitted to HMRC using MTD compatible software. There will be an end-of-year return to finalise and apply any amendments to previous quarters submitted. This will be due by 31 January and replace the current self-assessment tax return.
The deadlines for finalising tax affairs and making payments aren’t changing.
From April 2025 general partnerships that earn over £10,000 a year must sign up for Making Tax Digital for Income Tax.
From April 2026 it is expected Making tax Digital for corporation tax will start.
This is just a brief overview. If you’d like further detail, please contact your accountant.
Osian Williams FFA FIPA BSc (Econ)
Financial Accountant
07908810392