Making Tax Digital – What You Need To Know

There’s plenty of articles on the internet about MTD, most of them contain a lot of information that isn’t relevant to the majority of people. We’ve created this article to compile the relevant, useful information that most of us need to know about Making Tax Digital.

  • Making Tax Digital will be active from April 2019.
  •   In basic terms, it is a government scheme that means everybody will have to file tax and payment online as well as keeping records digitally. You’ll have your own account which will give you an overall picture of your tax. 
  • ALL business tax will  be a part of MTD but currently only VAT has a roll out date. The rest will follow in 2020 at the very earliest. 
  • Whatever size your business is, the impact of MTD is likely to be a significant one. 
  • The purpose of it is to reduce tax errors and generate an estimated £610 million in extra revenue for 2020-21. 
  •  One of the biggest benefits is forecast to be the digital record keeping and therefore real-time record keeping of tax documents. This means that you won’t be waiting til the end of each year to see how much you owe. You can monitor it throughout the year to plan and budget according to your tax bills. HRMC being able to see your updates to information in real time means that tax due and repayments will be kept to a minimum. 
  •  You can see the info that HMRC can see, you can check your details are correct and that nothing is holding up any processes being undertaken. The government says this will help HMRC tailor their services to meet the needs of individuals. 
  •    By 2020, your digital account will offer you a comprehensive picture of your finances – similar to your online banking accounts. 
  •  You’ll be able to interact with HMRC in a digital space when it suits you. Your digital account will provide you with advice, prompts and webchat support. 
  • For individuals, there will be options to update personal information and circumstances, see how much tax you need to pay and update financial information.
  • The digital software also means that there’ll be no need to keep repeating information to different HMRC departments. It’ll all be in one place for everybody to access. 
  •  The new digital approach to tax will mean that there will be significantly less penalties and interest charges. This is because there’ll be no late submission of information as it will be updated in real-time. 
  • The hope is that over time, there’ll be no need to complete a tax return at the end of the year.

If you have any questions regarding Making Tax Digital and what it means for you, contact the ABC Accounting Services team today!

Call us on – 01427 613613

Email us at – info@abc-accounting-services.co.uk

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