It’s hard to believe that there’s anything going on in the tax world other than Coronavirus business support schemes. As lockdown continues to ease and companies begin to resume their activities however, the government has reminded us about Making Tax Digital (MTD).
A new overview of MTD has revealed that all VAT-registered businesses with a VAT turnover below £85,000, will be required to follow MTD rules for returns filed on or after April 2022. While this might sound a long way off, if this year has taught us anything it’s that you never know what’s around the corner so it’s important to be prepared.
Making Tax Digital for VAT
VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are now required to follow the MTD rules by keeping digital records and using software to submit their VAT returns.
If you’re below the VAT threshold, you can voluntarily join the Making Tax Digital service now.
VAT-registered businesses with a taxable turnover below £85,000 will be required to follow the rules for their first return starting on or after April 2022.
Making Tax Digital for Income Tax
Self-employed businesses and landlords with a business turnover above £10,000, will need to follow the rules for MTD for income tax from their next account period starting on or after 6 April 2023.
Some businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot to test and develop the Making Tax Digital service for Income Tax. If you’re a self-employed business or landlord, you can voluntarily use software to keep business records digitally and send income tax updates to HMRC instead of filing a self-assessment tax return.
Supporting you through MTD
For further information about MTD and what it means for your business, please head to the gov.uk website. Alternatively, you can also get in touch with PKB and a friendly member of our team will be happy to help.
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