Overview of Making Tax Digital

Overview of Making Tax Digital

Making Tax Digital (MTD) is an initiative of the UK government that it took in 2015. It characterizes transformation to the way in which taxpayers record their financial transactions and submit their tax returns. According to HM Revenue and Customs (HMRC), MTD is intended to make management easier, effective, and efficient for all taxpayers including individuals and organizations.

Making Tax Digital

What are the key elements for taxpayers?

MTD implementation will necessitate the taxpayers to maintain their accountancy on online software; since paperwork will be no more required. The online store comprises numerous free and paid software for MTD. You can choose any suitable one and start making tax digital! Taxpayers will also be required to submit VAT returns and other updates to HMRC right via this software.

For your non-technical or new to accounting knowledge, BNW Accountants will be helping you throughout in these changes and provide you with the services essential for keeping you up-to-date.

BNW-Accountants

When does it begin?

Until or unless your income is below the Value Added Tax (VAT), you won’t be required to digitalize your accountancy or file VAT returns. But keep monitoring your annual income on a monthly basis because if it exceeds £85,000, you will have to be compliant with MTD. However, you can chose implement MTD even if your turnover is below £85,000.

MTD and Income Tax

Making Tax Digital is assumed to become compulsory for Income Tax as well but after 2021.

Making-Tax-Digital

What are possible exemptions?

Exemptions are for those individuals, landlords, and businesses who are not able to comply with digital engagement may be due to location problem, a physical issue, or religious reason. These exemptions are equivalent to the current exemptions for VAT returns and online filing.

VAT-Tax

Things to Know

Your business accounting transformation, from paperwork to the digital sheet, asks for significant discussion. Digitalization not only streamlines your business but it has several more advantages. So, if you haven’t maintained online accounting sheets for your business yet, take a step now because the sooner you opt this, the smoother will be your transition to MTD.

Tax-returns

MTD Compliance Requirement

  • If you are using Microsoft Excel or Google sheets, you will have to get a software which will let you make VAT returns and updates directly from the sheet. May be a bridging software
  • If you are using the software, it will have to be upgraded. Check if your existing is MTD compliant
  • If you are relying on paperwork to maintain a fiscal record, your all records will have to be automated.

We comprise a crew of accounting and taxation professionals, who can maintain your sheets without giving you any hassle. So, instead of tangling yourself in this hectic task, let us efficiently handle the responsibility.

BNW is the UK’s fast-growing auditing firm and we believe to deliver quality in the least expensive rates. To avail any of our accounting and taxation services, either give us a call on 0208 648 0800 or leave a message to info@bnwaccountants.co.uk. We are always here to help you better grow.

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