Making Tax Digital (MTD) means it’s fundamental changes to the way how the tax system works. HMRC ambition is one of the most digitally advanced tax administrations in the world. If we think about short term businesses like yours will be required to make, review and then submit your existing tax records digitally.
Today, Businesses are increasingly seeing the benefits of digitisation as we know. Millions of businesses are already banking, paying bills, online and interacting with their customers or suppliers online, and many peoples are already using accounting software.
When will MTD launch?
Making Tax Digital(MTD) is expected to apply to a range of taxes, including income tax, VAT, and corporation tax etc. However, these will come into effect at different times need to understand very well.
According to recent news, MTD for VAT will be the first to launch in April 2019, if we talk about income tax and corporation tax, it’s expected to come into effect from April 2020, maybe.
Who is affected by MTD?
Its full requirements for income tax and corporation tax are not known, there are so many information has been released regarding VAT.
For example, when it comes to VAT, businesses will fall within the remit of the initiative if they are VAT registered and have a turnover in excess of £80,000 as current VAT threshold businesses can also voluntarily opt-in if they so wish.
Making Tax Digital for VAT, the big changes businesses will face are the make sure to keep digital records, documents and file online VAT returns through software that is connected with the MTD platform.
What does Making Tax Digital mean for you?
Below are the important components of the Making Tax Digital(MTD) enterprise, which are:
- Digital Records: Your transaction data will need to be stored digitally, and there are specific rules put forward by the HMRC on what specific details you will need to store.
- Digital Links: Your VAT returns must have links to digital records. For VAT notice, where a digital link is required and how you might use that one.
- Digital Submission: For all VAT returns will need to be submitted digitally via the HMRC system Making Tax Digital API.
How do I get my business ready MTD for VAT success?
This point is very important to understand, How businesses should review their processes to see whether they are ready for the upcoming changes under Making Tax Digital (MTD) for VAT given its anticipated launch is just a few months away. In case, businesses should ensure how they should comply with the new digital record keeping the same requirements, and check that their software is compatible with the MTD platform.