28 Jul 2020
Update: Making Tax Digital
Making Tax Digital (MTD) was originally intended to be introduced for Income Tax in April 2018 but due to the suitable software challenges for the taxpayer and development of HMRC’s back end systems this was indefinitely delayed. HMRC shifted their focus to MTD for VAT as VAT returns were already filed quarterly and a higher proportion of VAT registered business would already use software.
Since April 2019 all VAT registered business with turnover greater than the £85,000 VAT threshold have been required comply with the VAT rules by keeping digital records and using software to submit their VAT returns.
To keep with their plan of extending the current requirements HMRC discreetly announced last week the following plans for MTD:
- To mandate those business who are VAT registered but currently have turnover under the £85,000 threshold into the MTD VAT regime from April 2022.
- To make MTD for Income Tax mandatory from 6th April 2023 for businesses and landlords with turnover in excess of £10,000
Additionally, there will be a consultation due in the Autumn 2020 on how MTD can be extended to include Corporation Tax.
To discuss MTD further, please contact our Digital Solutions team.