Will going digital be taxing for you?
Making Tax Digital (MTD) is a Government initiative that looks set to change the way that tax is administrated bringing an end to self-assessment and the start of a digitally enhanced system designed to be more effective, more efficient and easier for businesses and individuals to manage their taxes.
So, what does this mean for your business?
As of the 1st April 2019 VAT registered businesses with a taxable turnover over £85,000 will be required to record and submit digital tax returns. Furthermore, keeping paper records will no longer meet tax legislation obligations.
Most businesses and individuals submit their tax returns annually and by manually re-inputting information into the HMRC online portal, going forward businesses will be required to keep digital records and submit returns using compatible software outlined by the Government.
The first of the taxes to be phased in is VAT, followed by income and corporation tax, with the fully digitalised tax system expected to be wholly implemented by April 2020. The exception to this rule will be businesses that have complex needs, trusts and not for profit organisations and will qualify for a six-month deferral.