Making Tax Digital for VAT has already come in for VAT-registered businesses where their taxable turnover is more than £85,000. It will be coming in for VAT registered businesses with a taxable turnover below £85,000 from April 2022.
With regards to Making Tax Digital for Income Tax, this was due to be introduced for self-employed businesses and landlords with income above £10,000 from their first accounting period commencing on or after 6th April 2023. As with Making Tax Digital for VAT, there may be some exemptions. However, the Government announced on 23rd September 2021 that this was now going to be delayed until 6th April 2024.
Under the Making Tax Digital rules, your business will need to keep its accounting records digitally and will also have to file quarterly returns to HMRC which show income and expenditure for the period. At the end of your accounting period you will need to finalise your business income, making any accounting adjustments and confirming to HMRC that the updates you sent are correct. After the end of the tax year, a final declaration will need to be filed (this replaces the self-assessment tax return).
If you would like any advice or assistance in this area in preparation for the changes, please contact us on 0800 0523 555 or use our simple online contact form to arrange a free initial consultation.
Date published 26 Aug 2021 | Last updated 8 Oct 2021This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.