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68<br />
Coming Soon<br />
MTD for YOU!<br />
By Kieran Fitzgerald AATQB<br />
CMA Accountancy<br />
Making Tax Digital, or ‘MTD’ for short, was instigated by<br />
HMRC to digitise the tax administration process in the UK.<br />
Significant changes have already been made, and will<br />
continue to be made, to how businesses are required to store<br />
and report on their taxes. MTD will make the tax reporting<br />
process more efficient, effective and simpler for taxpayers to<br />
get their taxes right.<br />
Due to the pure size of the change, HMRC have broken<br />
MTD into manageable chunks to allow them to develop<br />
systems and manage queries, but also to give time to<br />
businesses to implement the necessary changes before<br />
the deadlines.<br />
The Story So Far<br />
After successful pilot schemes for Income Tax and VAT in<br />
2018, it became compulsory in 2019 for all VAT registered<br />
business with turnover over £85,000 to keep digital records<br />
and submit returns using MTD compatible software.<br />
MTD for VAT<br />
It was then announced that by 1st April 2020, all VAT<br />
registered businesses regardless of turnover were<br />
required to comply with the requirements of MTD, a date<br />
which has been extended to the 1st April 2022 due to the<br />
impact of COVID-19. This means an end to cut and paste<br />
data for VAT Returns, and a requirement to use functional<br />
compatible software products to submit returns to HMRC.<br />
MTD for Income Tax<br />
Following the full introduction of VAT registered<br />
businesses, the next stage in the MTD initiative is Making<br />
Tax Digital for Income Tax. Self-employed individuals<br />
and landlords with annual business or property income<br />
exceeding £10,000 will need to comply with the<br />
requirements of MTD for Income Tax from their first<br />
account period starting on or after 6th April 2023.<br />
If you are a self-employed business or landlord, you can<br />
voluntarily use software to keep business records digitally<br />
and send Income Tax updates to HMRC as opposed to<br />
filing a Self-Assessment tax return, before the compulsory<br />
deadline on 6th April 2023.<br />
MTD for Corporation Tax<br />
The UK government has published a consultation on the<br />
future design of MTD for Corporation Tax and is actively<br />
seeking views from companies and organisations within<br />
the scope of Corporation Tax, agents and software<br />
developers as to how best to proceed with these changes.<br />
In the future, the government will provide businesses<br />
with the opportunity to partake in a pilot for this stage<br />
of the MTD roll-out, and will not mandate its use before<br />
April 2026.<br />
Our team of VAT experts are well equipped to help<br />
you with your MTD requirements, and our website is<br />
full of handy tips on the benefits of cloud software,<br />
something you’ll need to migrate to in order to be<br />
fully MTD compliant. CMA are cloud accounting<br />
experts, and our Gold partnership status with Xero<br />
allows us to best position you for MTD compliance<br />
now, and in the future!<br />
To keep up to date with the latest changes<br />
and developments with MTD, and everything<br />
else in the world of accounting and business<br />
be sure to check out our brand-new website at<br />
www.cma-accountancy.com<br />
and register for our weekly newsletters.<br />
We offer a free consultation meeting to any individual<br />
who would like to speak to us about these changes.<br />
Feel free to give us a call and we can arrange to<br />
discuss this further. Alternatively, stay up to date on<br />
all of the latest developments via our website www.<br />
cma-accountancy.com by checking out our blog,<br />
and signing up for our weekly newsletters.<br />
Kieran Fitzgerald – CMA Accountancy<br />
39 Skull House Lane, Appley Bridge, <strong>Wigan</strong>, WN6 9DR<br />
01257 255521 info@cma-accountancy.com<br />
www.cma-accountancy.com