Simple Guide to Making Tax Digital (MTD)
Discover how Making Tax Digital affects you and your business and learn how to get started with MTD-compliant software.
What is Making Tax Digital (MTD)?
Making Tax Digital (MTD) has been introduced by HMRC to help individuals and businesses to get their tax right. It means many people are leaving their spreadsheets or paper records behind and moving over to a new system.
At the moment, Making Tax Digital is all about VAT submissions. But over the coming months and years it will include Income Tax for self employed individuals and Corporation Tax for Limited Companies.
How do businesses comply?
To comply with Making Tax Digital for VAT, businesses have to keep digital records. This must be done using what HMRC calls ‘compatible software’. In other words, it must be able to connect directly to HMRC and send your tax information.
Businesses must also send quarterly updates to HMRC before the quarterly deadlines.
For example, the first quarter begins with the first day of the tax year (6th April) and ends on 5th July. The deadline for the first quarter would be on 5th August.
When will MTD affect me?
MTD was introduced for nearly all VAT-registered businesses with a taxable turnover above £85,000 in April 2019. However, from April 2022 this has been extended to all VAT registered businesses in the UK.
VAT registered businesses have to use Making Tax Digital software to keep digital records and make VAT submissions to HMRC.
Making Tax Digital deadlines
We have been helping small businesses prepare for Making Tax Digital since 2018. Here are the latest key dates for compliance.
Making Tax Digital for VAT applies to all VAT-registered businesses.
Making Tax Digital for Income Tax applies to self-employed businesses and landlords with annual business or property income above £10,000
Making Tax Digital for Corporation Tax may come into effect.
Making Tax Digital is easy with Accounts Geek.
Whether you’re a sole trader or a limited company, we’ve partnered with a HMRC recognised accounting software (QuickBooks), to help you get ready for MTD.
Whatever your business size – prepare and track VAT returns in an MTD-compliant way. Track income and expenses. Invoice on the spot. Sync your bank account, credit cards and apps to get a clear view of your cash flow.
