HMRC Update – Making Tax Digital (MTD)

What is MTD?
MTD is a key part of the government’s plans to make it easier for businesses to get
their tax right and keep on top of their tax affairs. HMRC’s ambition is to be one of
the most digitally-advanced tax administrations in the world, modernising the tax
system to make it more effective, more efficient and easier for customers to comply.
Keeping digital records and providing updates to HMRC directly through
MTD-compatible software will help reduce errors, cost, uncertainty and worry.
This streamlined digital experience will integrate tax into day-to-day business
record-keeping, so that businesses can view their tax position in-year and be confident
that they have got their taxes right.

When is this due to happen?

You can sign up a client to MTD for Income Tax now, although the service will
remain voluntary until 2020 at the earliest.

From April 2019, MTD for VAT will be mandatory for businesses whose turnover
is above the VAT registration threshold (currently £85,000). This means that those
businesses will have to keep records digitally and use MTD-compatible software
to submit their VAT Returns to HMRC.
It will remain voluntary for VAT-registered businesses below the VAT threshold
until 2020, at the earliest.