MAKING TAX DIGITAL (MTD)
Making tax digital (MTD) is an initiative of UK government to transform the tax system digitally so that it is:
- More Efficient
- More effective
- Easier for tax payers to get their tax right
HMRC has a rolled out a phased approach to implement MTD from 2019 with all VAT registered businesses needing to comply from April 2022.
Making Tax Digital for VAT
From April 2022 all VAT-registered businesses will be required to follow the Making Tax Digital rules by keeping digital records and using a compatible software to prepare and submit their VAT returns. Kalyal Associates has moved all of its clients to one of recommended MTD compliant accounting softwares.
Making Tax Digital for Income Tax
From 6 April 2024 Self-employed businesses and landlords with annual property income above £10,000 will be required to follow the rules for Making Tax Digital for Income Tax.
Making Tax Digital for Corporation Tax
According to HMRC’s initial guidance Making Tax Digital for Corporation Tax will not be mandatory before 2026. However a pilot exercise will be run before that as well.