Tomorrow marks one month before the next significant stage in the ‘Making Tax Digital’ (MTD) initiative comes into force.
MTD is a Government initiative, designed to make tax projection and payment more straightforward and efficient for UK taxpayers. It focuses on the digitalisation of UK tax, with the aim of all taxpayers reporting on their income and expenditure a minimum of four times a year, replacing the current annual tax return and payment system. It is a staged initiative and taxpayers will need to be able to process their returns digitally to be able to comply with the new reporting schedule, at the appropriate point.
On 1st April 2022, all VAT-registered businesses must sign up ‘Making Tax Digital for VAT’. Previously, this had been the case for VAT-registered businesses with a taxable turnover of more than £85,000.
Small business owners affected by this change, who are yet to take steps to convert their tax administration from a paper-based system, can find information on the digital records required and how to sign up for MTD for VAT here.
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