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What is Making Tax Digital?
Making Tax Digital (MTD) is part of HM Revenue & Customs (HMRC) wider digital strategy to make it easier for individuals, businesses and other organisations to ensure their tax affairs are in order.
The driving force behind MTD is the belief within HMRC that taxpayer errors result in a significant proportion of the tax gap, the difference between the tax paid and tax due, and that poor record keeping is a major contributing factor to these errors.
MTD will therefore require businesses, other organisations and individuals to keep their records digitally, using either bookkeeping/accounting software or at the very least on spreadsheets. By doing so, HMRC believe that errors will be reduced and, with them, the tax gap.
When does it come into effect?
From April 2019 VAT Registered businesses/organisations with a turnover of more than £85,000 will be required to adopt and comply with Making Tax Digital.
Will it affect you or your organisation?
If you currently do a tax return or VAT returns then the simple answer is yes.
Even if you or your organisation or business do not fall within the criteria for digital record keeping and quarterly submissions in April 2019 or April 2020 then your interaction with HMRC will still become more digital.
More and more interaction will be through your Digital Personal or Business, Tax Account.
How can Streets help you prepare for and comply with Making Tax Digital?
We have a team of dedicated Making Tax Digital specialists who are able to advise you of the steps you need to take to comply with Making Tax Digital. For more information and guidance please CONTACT US.