Currently, businesses above the VAT threshold of £85,000 are required to comply with Making Tax Digital for VAT (MTD for VAT).
From April 2022, the initiative will be extended to all VAT-registered businesses which includes those with turnover below the VAT threshold.
From April 2023, MTD, will apply to taxpayers who file income tax self-assessment tax returns for business or property income over £10,000 annually.
According to the Treasury, the Making Tax Digital changes will affect the way that taxes are reported and not the level of tax that is collected. They will help to minimise avoidable mistakes, which cost the exchequer £8.5 billion in 2018/19.
Jesse Norman, Financial Secretary to the Treasury, said:
“We are setting out our next steps on Making Tax Digital… as we bring the UK’s tax system into the 21st century.
MTD will make it easier for businesses to keep on top of their tax affairs. But it also has huge potential to improve the productivity of our economy, and its resilience in times of crisis.”
Samantha Bennett of Harvey, Telford & Bates comments on Making Tax Digital’s next steps:
“At Harvey, Telford & Bates we will be able to help businesses navigate through the extension of Making Tax Digital. MTD will soon affect all businesses, so if you feel you require assistance, we will be on hand to advise you.”
For more information on how our team can help you understand or if you would like assistance with the extension of Making Tax Digital, please call us on 01743 462604, or email firstname.lastname@example.org.