Making Tax Digital (MTD) is a UK government initiative that sets out a vision for the ending the traditional tax return.
HMRC state that the main goal of Making Tax Digital is to make tax administration more effective, more efficient and simpler for taxpayers.
Under the new initiative taxpayers will send HMRC summaries of their income and expenditure at least 4 times a year.
HMRC say that this will enable a more accurate projection of tax due, as opposed to the current system of one tax bill at the end of the year. To do this, taxpayers will need to integrate their accounts with software in some way.
To do this HMRC is working closely with accounting software developers to ensure that taxpayers are able to make the switch to digital tax by 2020.
Top 10 resources:
We have pulled together some excellent resources for Making Tax Digital ranging from Gov.UK to software suppliers:
- HMRC – Making Tax Digital Overview
- Gov.UK – Suppliers supporting Making Tax Digital pilot
- Gov.UK – Making Tax Digital for Business – stakeholder communications pack
- Xero – Making Tax Digital
- Sage – What does Making Tax Digital mean for businesses
- Quickbooks – Are you ready for Digital Tax?
- AccountancyAge – Everything you need to know about Making Tax Digital for VAT
- Deloitte – Making Tax Digital in the UK – Get set for digital returns
- IRIS – Making Tax Digital: Simple, straightforward, effortless
- Clearbooks – Making Tax Digital
The timelines are laid out on the HMRC – Making Tax Digital Overview page.
Obviously, depending on your circumstances, this could be a massive change to how you manage and report your accounts.
Check whether your current accountancy software package is preparing for Making Tax Digital. Speak to your accountant.
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