Making Tax Digital
ABS Accountancy will work with you to ensure that you are fully prepared for Making Tax Digital.
Making Tax Digital (MTD) revolutionises the UK tax system, impacting accounting, maintenance of tax records. MTD encompasses VAT and income tax self-assessment (ITSA).
Bringing the UK tax system into the 21st century
Making Tax Digital (MTD) is a fundamental change to the administration of the UK tax system. It affects how businesses, organisations, and individuals maintain their accounting records. Additionally, it impacts how they transact and communicate with HMRC. Moreover, MTD has three key elements: MTD for VAT, MTD for income tax self-assessment (ITSA), and MTD for Corporation Tax.
The primary objective is to leverage digital platforms to simplify tax compliance for businesses, organisations, and individuals. By transitioning from manual to digital processes, the tax system becomes more agile, reducing errors and delays while improving overall compliance.
By transitioning from manual to digital processes, the tax system becomes more agile, reducing errors and delays while improving overall compliance. Taxpayers can seamlessly manage their tax affairs, including record-keeping, filing returns.
Are you ready for MTD?
HMRC is rapidly digitalising the UK tax system. The transformation began in April 2019 with Making Tax Digital (MTD) for VAT for businesses exceeding the VAT threshold. HMRC extended MTD for VAT to all businesses in April 2022.
The upcoming phase of HMRC’s digital overhaul is MTD for Income Tax and Self-Assessment (ITSA), which will begin on April 6, 2026. In April 2024, HMRC launched a pilot phase.
- Utilising cloud software like Xero, Quickbook, etc. Ensure your software is updated for compliance.
- Employing spreadsheets with HMRC bridging software for creating digital links.
- Utilising your own or bespoke software, ensuring digital links between systems.
