Making Tax Digital

Making Tax Digital (MTD)

Making Tax Digital is a big change for businesses, landlords, and individuals alike. While it offers many benefits, such as improved accuracy and efficiency, it also presents challenges related to software adoption and compliance. As MTD continues to evolve, it’s essential for everyone involved to stay informed and be ready to adapt to this new way of managing tax affairs.

MTD for Business, focuses primarily on VAT-registered businesses. Since April 2019, businesses with a taxable turnover above the VAT threshold have been required to comply with MTD, and as of April 2022, all VAT-registered businesses must follow these rules, regardless of their turnover.

The main requirement is to maintain digital records and submit VAT returns using compatible software. This shift to digital aims to streamline tax processes, reduce errors, and improve accuracy.

By providing real-time insights into financial data, businesses can make better decisions and reduce their compliance burdens. However, the transition can be challenging, as businesses need to adapt to new software and processes, which may involve initial costs and training.

MTD for Landlords. This applies to landlords who earn property income and will require them to keep digital records and submit quarterly updates to HMRC.

For landlords with income over £50,000, the new rules will come into effect in April 2026, while those with income over £30,000 will need to comply starting in April 2027.

By using MTD-compatible software, landlords can improve accuracy and reduce errors in their tax reporting.

However, like businesses, landlords may face challenges in transitioning to digital record-keeping, which might require some investment in new tools and a bit of learning.

MTD for Individuals, specifically focuses on self-employed individuals (and landlords). This will also be phased in, starting in April 2026 for those with income over £50,000 and from April 2027 for those with income over £30,000.

Individuals will need to maintain digital records and submit quarterly updates to HMRC, moving away from the traditional annual tax return.

This shift encourages the use of digital tools, making it easier for individuals to manage their taxes. However, adapting to these new systems can be daunting for some, as it requires learning new software and processes.
 

MTD Advice

Small businesses and self-employed individuals should prepare for Making Tax Digital UK requirements for income tax reporting.

To stay compliant with Making Tax Digital UK, you'll need to use HMRC-approved software for maintaining financial records and submitting tax information. Simplifying your tax reporting by requiring digital record-keeping and online submissions.

The key is to start preparing now - don't get caught off guard! Keeping accurate digital accounting records makes submitting your tax return at the end of the accounting period more straightforward.

How I Can Help You Prepare

• Software Selection: Helping you choose the right MTD-compatible software for your business needs.
• Digital Record Keeping: Setting up efficient systems to ensure your records meet HMRC requirements.
• Quarterly Updates: Managing your quarterly submissions, ensuring accuracy and timeliness.
• Training: Offering personalized training to help you understand and use your new digital tax tools.
• Ongoing Support: Always available to answer your questions and keep you compliant.

Helping my clients make an easy transition to Digital Tax Accounting

I am a certified instructor helping my clients transition to MTD. If you need help with making tax digital and but are not vat registered, or you need help with software. 

I understand that getting used to regular tax filing and new online accounting software can seem daunting. Having a trusted accountant is crucial to having peace of mind, and I will go above and beyond to make sure that this is the case.

Having already helped a wide range of clients getting started with Making Tax Digital I can assist you with cloud accounting software and procedures.

Making sure that no matter your situation, you are being correctly taxed.  I take care of your business and personal tax returns so you don't have to worry about getting it wrong!

- Andrew Passer London

Experienced and committed to providing exceptional service to help you manage your finances more effectively.

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Institute of Financial Accountants

The Institute of Financial Accountants (IFA) is an internationally recognised professional accountancy membership body providing dedicated support to SMEs and SMPs.