With most compulsory VAT registered businesses reporting under Making Tax Digital (MTD) for a few years now, HMRC are looking towards the next tranche of MTD compliance.
The following update may already be in hand or may not affect you directly but feel free to forward on to anyone that you think may benefit from the summary:-
Making Tax Digital for VAT – what’s next?
The Government is extending the requirement to operate (MTD) beyond compulsory VAT registered businesses to include voluntarily VAT registered businesses. For VAT periods starting on or after 1stApril 2022 voluntary VAT registered businesses will also be required to keep digital records and submit VAT returns through a compatible software. Manual returns will no longer be submitted through HMRC’s website. Affected businesses may have already received a letter from HMRC about these changes.
If you or anyone you know would like to discuss this with one of the team including the tailored solutions available, please feel free to call the office and speak to the team.
Making Tax Digital for Income Tax
From 6th April 2024, MTD will also apply to the self employed and landlords with aggregate turnover and / or gross rental income of greater than £10,000.
Affected taxpayers will be required to submit to HMRC quarterly returns on qualifying income and expenses via their personal digital tax account. For now this does not affect taxpayers who are taxed entirely via PAYE or trade only via a limited company. MTD for corporation tax is expected to be announced after MTD for income tax has been successfully rolled out.
Please note that if you have turnover from your self employment of lower than £10,000 and gross rental income of less than £10,000 but in aggregate they are over £10k, both will need to be reported quarterly under MTD as the gross aggregate is key.
We are currently awaiting further information from HMRC regarding the specific rules on MTD for income tax but in the meantime are already working with various software solutions to help meet your needs.
We will keep you posted with further updates as we receive them but please speak with us if you have any queries in the meantime.