About Making Tax Digital

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HMRC are embarking on a radical overhaul of the way taxes are filed in the UK and are rolling out an initiative to Make Tax Digital (MTD). HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world and Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is:

• more effective
• more efficient
• easier for taxpayers to get their tax right

MTD covers both individuals and businesses across a number of taxes.

If you run a VAT-registered business with a taxable turnover above the VAT registration threshold (currently £85,000) you are required to keep digital VAT business records and send returns using Making Tax Digital (MTD)-compatible software for VAT periods starting on or after 1 April 2019.

Some organisations including smaller not-for-profits have until October 2019 to comply.

For Income Tax and Corporate Tax, MTD will not be mandated until April 2020 at the earliest.

When the Making Tax Digital rules start

The Making Tax Digital rules apply from your first VAT period starting on or after 1 April 2019. A ‘VAT period’ is the inclusive dates covered by your VAT Return.

Some businesses may have received a letter from HMRC informing them that their start date is delayed until October 2019. These businesses can still register for the HMRC pilot scheme

Even if your next VAT return has to be submitted digitally don’t worry VAT Bridging Software can do it for you!