Upcoming changes to Making Tax Digital (MTD)
In the push to make everything Digital, the Government released some information only to then decide now was not a great time to burden businesses with the changes. Although some of the details below have been postponed by a year, it is still a good idea to take a look and plan for the future to make the transition smoother when it does arrive, eventually.
VAT – from April 2022
VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are already required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns.
If you are below the VAT threshold you can voluntarily join the Making Tax Digital service now.
VAT-registered businesses with a taxable turnover below £85,000 will be required to follow Making Tax digital rules for their first return starting on or after 6 April 2022.
Income Tax – from April 2024 (delayed from 2023)
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 their next accounting period starting on or after 6 April 2024.
Partnerships will not be required to join MTD for Income Tax until 6 April 2025.
It is proposed that Self Assessment tax returns will be replaced by 5 new reporting obligations, 1 per quarter as well as a year-end final declaration. Your software should prompt you when to file.
You’ll need to keep digital records of all your business income and expenses including income from self-employment or property.
You’ll use software to keep records and send updates. Make sure you have software that’s compatible with Making Tax Digital for Income Tax.
Alternatively, get in touch and we can take care of this for you.
MATCH is working hard to keep on top of all the latest news and government support so, as always, feel free to get in touch if you have any queries and we’ll be happy to help.
MATCH Accounting Limited