Making Tax Digital
Are You Ready For
Making Tax Digital?
Making Tax Digital (MTD) is a major initiative by the UK government aimed at simplifying and automating tax administration. This scheme represents a significant shift in how taxpayers record and submit tax information, requiring a move away from annual tax returns towards a digitised, real-time system where tax data is recorded and reported online. Launched by the UK’s tax, payments, and customs authority, His Majesty’s Revenue and Customs (HMRC), MTD forms part of the government’s broader plan to make the UK’s tax system one of the most digitally advanced tax systems globally.
Here, at Smart, we are at the forefront of UK MTD and have the facilities to switch you over immediately.
What Is 'Making Tax Digital'?
MTD has multiple key components. Firstly, it mandates the use of digital records for tax purposes, which should include all financial transactions relevant to tax liabilities. Under MTD, businesses and individuals are required to maintain and preserve these records using functional compatible software (software which can interact with HMRC systems) which also allows them to update HMRC directly through Application Programming Interfaces (APIs).
Moreover, MTD aims to provide a more accurate, efficient, and convenient tax reporting system. Through the personalised digital tax account created for each taxpayer, the individuals and businesses can see an overview of their tax situation in real time, reducing the need for annual tax returns, providing certainty over tax bills and reducing errors.
Join The Revolution
Transforming The UK Tax System
The MTD initiative is being rolled out in phases. Since April 2019, the initiative was implemented for VAT-registered businesses with a taxable turnover above the VAT threshold of £85,000. These businesses must keep their records digitally and submit their VAT returns using MTD-compatible software.
While the transition may initially require investment in digital systems, training, and compliance, it should also present opportunities for efficiencies and increased understanding of one’s financial position in the longer term. In order for this initiative to succeed, support from HMRC and the collaboration of software developers, tax agents, and taxpayers are essential in this digital evolution of the UK’s tax system.
To find out more about Making Tax Digital and how it can transform your business process simply get in touch, using the form below, or call us on 01530 832549