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.
July 2020 saw the treasury provide a written statement declaring HMRC's 10 year plan signalling their intent to make tax:
- More effective
- More efficient
- Easier for taxpayers
A further written statement published in September 2021 introduced the legislation and confirmed the following dates identified below.
HMRC’s MTD journey so far:
What's next for MTD
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 has recently released an updated roadmap for Making Tax Digital, the highlights of which are:
- MTD for VAT to be extended to all VAT businesses (includes voluntary registrations under registration threshold) from 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 April 2024.
- General Partnerships will need to follow the rules for MTD for ITSA from April 2025.
Future-proofing with TaxCalc
We are actively working on solutions, as recognised by HMRC, to make the transition into MTD for Income Tax as seamless as possible.
Initially we will be providing a method to submit periodic updates to HMRC and enhancing the range from there. We are also keen to develop transactional record keeping, in time, as a solution for the digital record keeping requirements to assist in the submission of quarterly updates to HMRC.
Our MTD journey together is an ongoing one. Please watch this space for further updates as they arise.