Making Tax Digital: A Guide By 1st of
April 2022, all VAT-registered businesses must sign up to Making Tax Digital.
This is the first step in HMRC’s plan to digitise the UK’s taxation system.
This month’s blog at Clifton-Crick Sharp &
Co offers a guide to Making Tax Digital. For more information, call us in
Worcester on 01386 561100 .
What is Making Tax Digital? Also known as MTD, Making Tax Digital was first introduced
in April 2019 for VAT registered businesses trading above the VAT registration
threshold of £85,000. Now, businesses with a turnover of under £85,000 must
also comply from April 2022.
Making Tax Digital for Income Tax will follow, for landlords
and self-employed businesses with an annual income (not profits) of over
£10,000 with effect from April 2024. The overall aim of Making Tax Digital is
to reduce errors in tax returns and go paperless.
What are the Advantages? There are several advantages to MTD. Firstly, it means you
can monitor your business’ outcomes and expensive whenever you like. There is
also no need to hoard paperwork such as invoices and receipts.
Furthermore, errors are less likely to occur as data is
uploaded throughout the year rather than every quarter. Making mistakes and
missing deadlines can lead to costly mistakes. With digital software, your
business will benefit.
Another advantage to MTD is that you can view real-time
financial updates. This means you can make informed decisions throughout the
year knowing you have the finances. The software also comes with additional
financial tools.
Register Before the Deadline Switching over to digital tax doesn’t have to be difficult. To
sign up to Making Tax Digital, You can register your business online via the
Government Gateway. If you don’t already have a login, you will need to create
a new account. Additionally, Clifton-Crick Sharp & Co can assist you with
creating and managing your account.
Once your business has signed up, you must keep digital VAT
records and use Making Tax Digital-compatible software to complete the
following:
Updating your VAT
records Generating new VAT
returns Submitting new VAT
returns to HMRC online
Contact Us Today For more information about meeting the Making Tax Digital
deadline, contact Clifton-Crick Sharp & Co. Call us in Worcester on 01386 561100 . Alternatively, you can make an
enquiry via our online contact form .
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