Making Tax Digital
The Making Tax Digital roadmap sets out an ambitious vision on how the tax system will be transformed for the digital age. All accounting records must be able to link into HMRC’s system. This will only be achieved by using software which has been approved by HMRC and is compatible with their systems. The roll out of MTD is to commence from April 2019 for all VAT registered businesses who will need to keep digital records. All other businesses will have to start quarterly filing from April 2020. Making Tax Digital will eventually apply to sole traders, partnerships and limited companies.
Benefits of Making Tax Digital:
- Accurate Tax Information – replacing paper-based bookkeeping with digital tax accounts will let you check the information HMRC holds about you is 100% correct
- Reduced Errors – Making Tax Digital’s new reporting function will allow HMRC to 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
