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All VAT-registered businesses are required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns. If you don’t comply with the rules and meet Making Tax Digital deadlines, you could face a fine.
All VAT registered businesses must comply with MTD rules from April 2022. This includes sole traders, limited companies, partnerships and landlords with at least one property in the UK. MTD for VAT also applies to VAT registered charities and trusts.
HMRC will sign up all remaining businesses to Making Tax Digital for VAT automatically unless they are exempt or have applied for exemption.
Making Tax Digital for Income Tax for partnerships with individual partners.
Making Tax Digital for VAT will require you to keep business records digitally including:
Exemption from the Making Tax Digital (MTD) for VAT programme is available if you meet one of three criteria:
Read the full guide to exemption on .GOV.UK
From helping you choose the right cloud accounting software for the job to answering your tax-related questions, or helping you prepare your tax returns, accountants are best placed to help you and your business succeed with Making Tax Digital. Here at TBL Accountants, our team of experts are trained to ensure your accounts are fully compliant and we are committed to helping local businesses migrate to MTD as easily as possible.
If you are unsure of when your business should be submitting VAT returns, or whether you should have already registered for MTD altogether, we can help you. Get in touch with us and our team will provide the support you need to get started with Making Tax Digital.
TBL Accountants are your local accountancy firm operating in Billericay, Southend, and across Essex. We specialise in a variety of services as personal, business, and charity accountants. Want to find out more? Get in touch with our team today.
According to HMRC, Making Tax Digital is designed to “make it easier for individuals and businesses to get their tax right and keep on top of their affairs.” Going paperless is also a more sustainable and streamline solution to filing tax returns, with aims to be a more transparent and accurate way of dealing with accounts.
Yes, for now. From April 2024, MTD will be rolled out for Income Tax Self Assessment (MTD for ITSA). Businesses and landlords with an annual turnover above £10,000 will need to register for MTD for ITSA from April 2024.
MTD for Corporation Tax will not be mandated before April 2026 at the earliest.
HMRC will not be making software available, so you will have two options:
1, MTD for Income Tax Self Assessment compliant software that will enable you to report data as per MTD rules
2, Bridging software which works with non-MTD compatible software (such as Spreadsheets) so you can submit the necessary information to HMRC digitally at the end of each quarter and at the end of the year.
There are some exemptions to Making Tax Digital. On the launch of Making Tax Digital, these exemptions were announced “on the basis of digital exclusion”, with factors including:
Plus, any business that is already exempt from online filing for VAT will remain so under MTD without having to reapply. There are more details on exemptions here.
MTD for income tax will be effective from 6 April 2024 for all unincorporated businesses i.e. sole traders, partnerships, landlords etc. irrespective of when their current accounting period ends.
You can view the filing deadlines for MTD for income tax here.
Businesses must file their first MTD return for the VAT quarter starting on or after 1 April 2022.
HMRC will aim to introduce Making Tax Digital for Corporation Tax from April 2026.
If you don’t comply with the rules and meet Making Tax Digital deadlines, you could face a fine.
From January 2023, HMRC is moving to a points-based system so that Making Tax Digital for VAT penalties are only given to those who regularly make mistakes and miss deadlines. The new system means taxpayers who make the occasional error will not be penalised.
Points are calculated based on how regularly you submit. You can find more information about penalties here.
If you are a business, you can sign up to Making Tax Digital with your existing government gateway ID, or you can set up a new one if you don’t have an ID.
Here at TBL Accountants, our team of experts are trained to ensure your accounts are fully compliant and we are committed to helping local businesses migrate to MTD as easily as possible.
Contact us to find out how we can support you with registering for MTD
Our friendly, experienced team can support you on the road to Making Tax Digital. If you are looking for a reliable accountant or you are an existing client moving to MTD, then get in touch with our team today.
