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.
HMRC have recently released an updated roadmap for Making Tax Digital, the highlights of which are:
- VAT registered businesses with a taxable turnover below £85,000 will be required to follow Making Tax Digital rules for the first VAT Return starting on or after April 2022.
- Self-employed businesses and landlords, with annual business or property income above £10,000, will need to follow the rules for MTD for Income Tax from their next accounting period starting on or after 6 April 2023.
In addition, HMRC had already previously confirmed that they would extend the soft landing period to 1 April 2021, to allow businesses more time to ensure digital links are in place between software being used for VAT accounting purposes.
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.