Originally announced back in 2015, Making Tax Digital aims to digitise the UK’s taxation system through the use of digital records and online filing through compatible software. With just months to go before the launch of Making Tax Digital for VAT, find out if your business is prepared.
When will MTD launch?
Making Tax Digital is expected to apply to a range of taxes, including income tax, VAT, and corporation tax. However, these initiatives will come into effect at different times.
According to recent timelines, MTD for VAT will be the first to launch in April 2019, while for income tax and corporation tax, it’s expected to come into effect from April 2020, if not later.
Who is affected by MTD?
Although its full requirements for income tax and corporation tax are unknown, much more information has been released regarding VAT.
For example, when it comes to VAT, businesses will fall within the remit of the initiative if they are VAT registered and have turnover in excess of £85,000 (the current VAT registration threshold). Businesses can also voluntarily opt-in if they so wish.
Under Making Tax Digital for VAT, the main changes businesses will face are the requirements to keep digital records and file online VAT returns through software that is compatible with the MTD platform.
How do I get my business ready?
At this point in time, businesses should review their processes to see whether they are ready for the upcoming changes under Making Tax Digital for VAT given its anticipated launch is just a few months away. In particular, businesses should ensure they can comply with the new digital recordkeeping requirements, and check that their software is compatible with the MTD platform.