Making Tax Digital (MTD) – What does it mean for you?
So, if you are a business owner, and maybe even not a business owner, you will have heard the words Making Tax Digital or MTD at some point by now. This is the UK government’s initiative aimed at simplifying and modernizing the tax system by moving business record keeping online.
What does Making Tax Digital (MTD) mean?
Simply put, it means maintaining business records digitally and additionally, submitting tax returns using an MTD-compliant software. Instead of submitting a single annual tax return, you will provide updates to HMRC every three months.
Who does Making Tax Digital (MTD) affect?
- MTD for VAT became mandatory for all VAT-registered businesses from April 2022. All businesses that are VAT-registered, regardless of their turnover, must comply with MTD for VAT.
- From April 2026 all self-employed individuals sole – traders and landlords with an annual income over £50,000 will be required to use MTD for Income Tax. From April 2027 it will be all those with an annual income between £30,000 and £50,000
- Corporations: Eventually, MTD will extend to corporation tax submissions
There is an option to voluntarily sign up for MTD for Income Tax before these dates to get familiar with the system
What must you do now?
At the very least you need to be thinking about which MTD compliant software you will use to keep digital records and submit your tax returns. Secondly register for MTD with HMRC and ensure your software is linked to your HMRC account.
How can Manselters Ltd help you?
Manselters’ professional accounting support can make the transition to MTD smoother and more efficient.
Software Setup and Training
We will help you select and set up an MTD-compliant software and also provide training sessions to transition from paper or manual bookkeeping to digital records.
Quarterly Reporting:
We will reduce the administrative burden by reviewing your business records to ensure they are compliant with MTD regulations submitting quarterly updates to HMRC
Consultation Services:
Provide personalized advice on how you can optimize your tax processes and benefit from MTD