With the implementation of Making Tax Digital for VAT in April 2019, businesses have been using the system to manage their finances efficiently.
The Making Tax Digital Timeline
HMRC first introduced Making Tax Digital (MTD) in 2019 and since April of that year, businesses with a taxable turnover of more than £85,000 have had to use the system. Businesses with a turnover of less than £85,000 have until April 2022 to keep digital records and submit VAT returns online but can voluntary use the system before then.
Landlords and self-employed individuals with an annual income of over £10,000 do not have to use MTD until April 2023. The aim is to help businesses reduce errors in their tax returns and go paperless.
Advantages of MTD
Businesses benefit from the new system as tax information can be updated throughout the year. This means that instead of inputting the data from the year’s invoices and receipts at once, it can be done gradually, making the process more stress-free.
MTD also allows you to view your information on the HMRC account, so you will have access to financial updates whenever they are required. This can provide companies and sole traders with the confidence to make important decisions with valuable information from their online accounts.
Register Before the Deadline
Hiring professional accountants and using bridging software means that switching to MTD is not difficult. Voluntarily using this system before your specific deadline will ensure you quickly understand it and are used to how everything works.
To use MTD before your deadline, all you need to do is set up a Government Gateway account and then sign up for MTD. Our team at SCS Financial Management are on hand to assist you with creating and managing an account, so please get in touch for a free consultation.
Find Out More Guide to Making Tax Digital
Contact the team at SCS Financial Management in Reigate for more information about Making Tax Digital and its benefits. Our specialists always know the latest news regarding tax. Call us on 01737 373707 or send a message via the contact form with any queries and we will be happy to help.