Making Tax Digital
What is Making Tax Digital?
Making Tax Digital is intended to bring the UK tax system into the 21st century by providing businesses with a modern, streamlined system to keep their tax records and provide information to HM Revenue & Customs (HMRC).
The first to be affected are small businesses and individuals with a turnover above the VAT threshold of £85,000, who are required to keep digital records for VAT purposes from April 2019.
Why is HMRC introducing it?
Making Tax Digital is intended to help you better keep track of how much tax you owe –
or how much you are due back – throughout the financial year.
Accurate Tax Information
Replacing paper-based bookkeeping with digital tax accounts will let you check the information HMRC holds about you is 100% correct.
Making Tax Digital’s new reporting function will allow HMRC will look at your tax information almost immediately, reducing human error from data input.
Easier to understand
HMRC anticipates taxpayers will better understand how much tax is owed within
the digital tax account – much like online banking.
Easier contact with HMRC
Making Tax Digital will make it easier for you to contact HMRC online via
webchats and secure messages.
When will Making Tax Digital affect me?
April 2019 – Businesses with a turnover above the VAT threshold (currently £85,000) must keep digital records but only for VAT purposes.
2021 – Further roll-out of Making Tax Digital is expected to affect small businesses under the VAT threshold.
Please be aware that the above dates – to keep up to date with the latest news about Making Tax Digital, please click below.