Latest MTD News
Making Tax Digital: what small businesses and the self-employed need to know
To improve efficiency, HMRC want to go paperless. Making Tax Digital involves keeping digital records and using software to complete tax returns. Eventually, keeping paper records won’t meet the requirements of tax legislation.
No Brexit worries for Making Tax Digital, says HMRC
It had been suggested that the Revenue would have to delay the scheme, scheduled to launch on April 1, for more than a million VAT-registered businesses, if the UK was to crash out of the EU without a deal.
However, in a letter to the Financial Times, HMRC deputy chief executive Jim Harra, wrote, “The truth is our system is already live and by the end of February we’ll have written to every affected business encouraging them to join the thousands of others who have registered.”
Only 57 percent of businesses are ready for Making Tax Digital deadline
HMRC’s ambitions to turn the UK into one of the most digitally advanced tax regimes in the world have been beset with challenges as companies drag their heels in complying with the Making Tax Digital deadline.
Government warned of dangers in digital tax
In a discussion paper published, the OTS suggested technology had the potential to create a tax system where taxpayers need only "press a button" to meet tax obligations.
But the paper warned with these advances come the risk taxpayers may become disengaged with their own tax affairs, leading to problems with culpability in the event of errors.
Five misconceptions about Making Tax Digital and small businesses
1. Paper records are adequate so long as the totals are recorded in MTD-compliant software
Making Tax Digital means that each and every transaction must be recorded electronically. Part of the intention behind MTD is that manual entry increases the risk of errors, and all data transfer, not just totals, has to be done digitally.
That is not to say you can’t keep paper records; but you will have to duplicate the work by entering every item into an MTD-compliant software package, which rather defeats the object of the exercise.
Businesses should start engaging with HMRC digitally for VAT
HMRC has extended its Making Tax Digital for VAT (MTD-VAT) pilot, meaning that all customers mandated to use the MTD service from April are now able to access the pilot. All Value Added Tax (VAT) registered entities with an annual VAT-able turnover of £85,000 or more will now therefore have the chance to test their accounting systems, prior to them being required to keep a digital record of their VAT transactions from 1 April 2019 onwards.
Making Tax Digital can be a game-changer for all
With the tinsel down and the sound of Auld Lang Syne firmly behind us, it’s time to look at what’s on the agenda for 2019 and it’s going to be a busy one. If it hasn’t already been on your to-do list – and it definitely should have been by now – it’s now less than 90 days until the first phase of the new Making Tax Digital (MTD) legislation comes into effect for VAT.