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Making Tax Digital

Making Tax Digital (MTD) is the government's initiative to ensure the tax system is streamlined and efficient.

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MTD began on 1st April 2019 with MTD for VAT.  MTD for income tax is scheduled to begin on 5th April 2021, with other taxes on hold until a later date.

MTD for VAT

  • Mandatory for all businesses and organisations who are registered for VAT and have taxable turnover above £85,000

  • Since VAT periods beginning on or after 1st April 2019 these businesses need to keep digital accounting records

  • VAT reporting to HMRC is direct from your digital accounting records

MTD for income tax

  • Effective from April 2021 at the earliest

  • Affecting individuals, sole traders, partnerships who currently complete a self-assessment tax return

  • Quarterly reporting of income and expense amounts to HMRC

  • Records of income and expenses will need to be kept digitally

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