HMRC's Making Tax Digital Timeline
HMRC has plans to become one of the most digitally-advanced tax administrations in the world. This means that big changes are needed to our current tax system, affecting both how data is collected and how it is stored by HMRC.
HMRC has taken a major step forward in achieving this with the launch of the Making Tax Digital initiative. This, to use their words, will transform tax administration, so that it is:
- More effective
- More efficient
- Easier for taxpayers to get their tax right
HMRC’s MTD journey so far:
For many businesses, the starting point for MTD is VAT. As of 1 April 2019, businesses registered for VAT because their turnover is over the threshold (currently £85,000) have to submit VAT Returns using the new MTD for VAT service.
As well as using the new MTD for VAT service, these businesses will also be required to keep digital records.
Now that MTD for VAT is underway, HMRC is concentrating its efforts on MTD for Income Tax or Quarterly Updates, as it’s also known.
This requires businesses to send quarterly updates to HMRC, with details of business transactions during that quarter. They will need to be submitted in a timely manner (within 30 days of the quarter end).
With uncertainties around the impact of BREXIT, hard and fast commitments are yet to be made official. It is however, HMRC’s vision that all taxpayers will be able to see a single picture of their liabilities and entitlements in a digital account.
Future-proofing with TaxCalc
As a recognised software provider to the business and accounting community, we stay close to HMRC and will keep you updated with furthers news and changes as and when they occur. Rest assured, we make it our business to develop and release new products – as well as enhancing our existing products - to keep you in pace with change and stay compliant.