Making Tax Digital (MTD)
Making Tax Digital (MTD) is a scheme from the HMRC to deliver regular and accurate information to them for more concise tax reporting.
HMRC MTD is a very common way now to send your VAT Return over to HMRC. Our software options are all MTD Ready and can be set up in minutes to deliver MTD.
What does it mean, for me?
All VAT registered businesses will need to submit VAT returns via MTD by April 2022!
As with any new ‘red tape’, there is a lot of apathy, anxiety, head in sand attitude, acceptance etc. Hopefully this explanation gives you a better idea of what is involved and more importantly what you need to do.
HMRC’s research has led them to think that over 9 billion pounds is being lost in tax revenue annually, hence the creation of MTD (Making Tax Digital), this will be a quarterly return.
There have been many business surveys over the years which have found that if any business processes their accounts quarterly then they have a 71% chance of surviving. Businesses with excellent bookkeeping have a 63% chance of survival. This is against annual accounting 36% survival and poor non-existent bookkeeping 2.5% survival rate.
If you are running a business with sales / turnover more than £10,000 annually then MTD will affect you. The majority of businesses will need to make a MTD return starting from 1st April 2022. If you are a VAT registered business with a sales / turnover more than £85,000 annually then you need to start from 1st April 2019.
What data is required? The MTD return comprises of each invoice date, value excluding any Vat and the VAT rate if you are VAT registered. It requires your business name, address and VAT number if registered.
This information can only be sent to HMRC via a recognised provider – mainly the accounting software packages. You will also need HMRC gateway access – most businesses already have a gateway for VAT, PAYE etc. For sole traders then my understanding is that it will be accessed via the HMRC personal gateway for self-certification returns. They are calling this your own Digital Tax Account (DTA).
What is Making Tax Digital (MTD)?
Sheila Bell from Swann Systems discusses the hot topic of Making Tax Digital (MTD) at an FSB Networking Event.
- Statistics of why we should do bookkeeping regularly
- What is Making Tax Digital (MTD)?
- VAT Registered businesses
- Explaining the VAT Return
- Personal and Business HMRC Gateways
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HMRC Making Tax Digital (MTD) Blogs
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