What is Making Tax Digital

    Making Tax Digital (MTD) is a government initiative to modernise HMRC’s tax system, with the aim
    of making the whole process of administrating tax simpler and more efficient.

    Making Tax Digital for Income Tax

    Have you heard about the new rules coming into effect for Making Tax Digital (MTD)? If you’re self-employed or a property landlord with an income of over £50,000, then MTD for Income Tax Self-Assessment will become mandatory from 6 April 2026.
     
    So what does this mean for you? You’ll need to keep digital accounting records and provide quarterly updates on your income and expenditure to HMRC through MTD-compatible software. It’s important to note that quarterly income tax reports must be submitted within 1 month of the quarter’s end.
     
    If your income falls between £30,000 and £50,000, you must follow these rules starting April 2027. However, the government is aware that this may be challenging for smaller businesses, particularly those under the £30,000 income threshold. That’s why they’re conducting a review to ensure that MTD for ITSA can be tailored to meet the needs of these businesses and inform any further rollout of MTD for ITSA after April 2027.
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    Making Tax Digital for Vat

    Most VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are already familiar with Making Tax Digital. They’ve been required to keep digital VAT records and send returns using MTD compatible software since 2019.

    From April 2022, Making Tax Digital will apply to all VAT-registered businesses (with a few exceptions).

    If you require our assistance with Making Tax Digital please contact us.

    Assistance with Making Tax Digital

    We have an extremely knowledgeable team ready to help you get up and running with digital record keeping. We use cloud accounting to satisfy the digital record keeping requirement. We have migrated a large number of our clients from manual record keeping to cloud accounting to ensure compliance with the Making Tax Digital rules. Record keeping does not need to be difficult and we are able to advise you on digital software so that keeping your records is easy.

    Our staff are trained on Xero and other software so we are able to assist you with your software queries.

    If you have concerns over whether you are compliant with Making Tax Digital or you need help setting up a cloud accounting package please call to arrange a free initial consultation.

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