Making Tax Digital: what happens next?

Making Tax Digital (MTD) for VAT was launched in April 2019, which means that hundreds of thousands of businesses are now recording and reporting their accounts digitally to HM Revenue & Customs (HMRC).

For VAT-registered firms that are above the VAT threshold of £85,000, the first submission deadlines for MTD for VAT were on 7 June 2019 for those reporting monthly.

The first submission deadlines for businesses that report their figures quarterly were on 7 August, with subsequent dates on 7 September 2019 and 7 October 2019 depending on the VAT quarter end of the business.

Firms with more intricate VAT affairs have been given more time to submit their first reports, with a deadline of October 2019. By October, all VAT-registered businesses must comply, including some charities and public sector bodies.

VAT notice update

The VAT notice for Making Tax Digital (MTD) was updated in July, which relaxed the rules surrounding suppliers, petty cash and third parties.

Businesses are also benefitting from a ‘soft landing period’ of up to one year, as HMRC aims to ensure that MTD for VAT is correctly in place, with companies reporting their affairs accurately without issues.

Making Tax Digital for Income Tax

The Government initially planned for the introduction of MTD for Income Tax and Corporation Tax to be introduced in April 2020, but this was later amended.

A Written Ministerial Statement included an amendment which confirmed that MTD for any other forms of tax would be delayed until April 2021 at the earliest.

Although the date for the full implementation of Making Tax Digital has been delayed, it is important that businesses and individuals review their systems to ensure that they are adequately prepared for the digitisation of the tax process.

For advice on Making Tax Digital and VAT, contact our expert team today.

Posted in Accountancy, Accounting, Blog, Business, Corporation Tax, HMRC, Income Tax, Making Tax Digital, MTD, SME, SMEs, SMEs / Business, Tax, VAT.