Making Tax Digital is a government initiative that sets out a vision for a transformed, a fully digital tax system. Making Tax Digital presents significant benefits. It means that taxpayers do not have to give HMRC information that it already has, or that it is able to get from elsewhere – for instance from employers, banks, building societies and other government departments.
Digital tax accounts means that taxpayers can see the information that HMRC holds and be able to check at any time that their details are complete and correct.
What you need to know:
- There are no more annual tax returns.
Instead of annual return businesses, self-employed people and landlords will provide financial updates to HMRC digitally at least four times a year via their digital tax account.
- We already have access to our digital tax account.
Each individual can register with HMRC and access to their personal information such as: NI contribution for previous years, salary, Child Benefit, Tax credits and other. There is a range of HMRC services available through digital tax accounts.
- Your business’s figures will be submitted using software.
You or your accountant will keep inform HMRC through accounting software.
- Tax will be updated in ‘real-time’.You don’t need to wait the end of year to determine tax you owe. Your tax position will be clear every quarter. 5.A few groups are exempt from Making Tax Digital (MTD) programme.
• The threshold for MTD obligations is £10,000. If your business annual sales fall below £10,000 you can be exempt, however you can still participate voluntarily.
• Those who genuinely can’t get online due to their individual circumstances such as disability, geographical or other reasons.
- April 2018 – start keeping digital records and providing quarterly updates of Income Tax for businesses, self-employed people and landlords with annual turnover above the VAT threshold.
- In 2019-20 - start keeping digital records and providing quarterly updates of Income Tax for all businesses, self-employed people and landlords with annual turnover above £10,000.
2019 - Move to VAT digital.
2020 - Corporation tax.