Making Tax Digital (MTD) is a government initiative, which aims to improve the tax system to ensure that the right amount of tax is paid by those that should be paying it.
It’s a key part of the government’s plans to make it easier for individuals and businesses alike to get their tax right and keep on top of their affairs.
HMRC has stated it has ambitions to be: “the most digitally advanced tax administration in the world”. MTD will affect most businesses above the VAT threshold.
MTD is being introduced on the 1 April 2019 for those that are VAT registered (current VAT threshold is £85,000) and April 2020 for those that are non-VAT registered. This means that all self-employed ADIs will need to comply.
In summary, the new MTD laws will mean:
- Digital record keeping
- Quarterly submissions to HMRC
- New penalty system
Head over to GOV.UK to find out more and ensure you comply with the new regulations.
More information on VAT thresholds can also be found on GOV.UK.