Making tax digital is introduced by HMRC. HMRC Making Tax Digital plans involve getting small businesses and the self-employed to complete digital tax records and returns, with the eventual aim of going completely paperless. The goal behind making tax digital is to become one of the most advanced tax administration in the world. Digitalization of tax account aims to make it easier for people to manage their tax affairs.
The UK has Introduced Making Tax Digital for VAT (MTD), Requiring Taxpayers to Maintain Records, and Submit VAT returns digitally via an API. MTD has been introduced in the UK to create a digital tax system which will be modern and streamlined and thus will make it easier for businesses to file their returns and get their tax right. For registered businesses in the UK having gross sales revenue greater than £85,000, MTD is currently mandatory. MTD is transforming the business making changes in the fundamentals of tax systems so that the tax system of the country becomes. The motive behind MTD is to increase its
Post the initiation of Making Tax Digital by the Government, the following things have been anticipated.
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On 1st April 2019 the first major step toward MTD was taken. In this all VAT-registered businesses in the UK with a turnover above the specified threshold where required to store financial records relating to VAT and to file VAT returns digitally using MTD-compatible software. Another key update related to MTD was that now every small business owner and /or a sole trader has now a digital tax account which can be used by them to check their Tax status and documents digitally. In the March 2020 issued evaluation of Making Tax Digital by the government it is been reported that more than 1.4 million businesses had signed up for Making Tax digital VAT and more than 4 million VAT returns had been submitted successfully using MTD compatible software.
By the evaluation that HMRC has done, it was found that some business owners have experienced a smooth transition from traditional filing of VAT using spreadsheets to digital VAT filing post its introduction. In report published by HMRC it has also been highlighted that, in the survey conducted by the Lloyds Bank UK Consumer Digital Index 2019, it has been observed that those who are the most digitally engaged save a day a week in administration compared to the businesses that are following the traditional practice of filing a return.
Making Tax digital is an initiative taken by the UK government so to make the tax administration most advanced and technology friendly across the world. Although the complete digitalization of the tax industry is a lengthy process and will take time to get implemented completely, this initiative is welcomed by us as we see the perks and benefits associated with it. We make use of all the MTD compatible software and provide our clients with state-of-the-art accounting and tax services. Few steps that as service provider have taken toward making tax digital reality are:
In order to ensure that you remain in adherence with the governments norms and be benefited with MTD as and when implicated. Connect with us now and ensure a successful and smooth transition.
Yes, MTD for VAT registered business who have crossed the threshold of €85000 it is mandatory.
The only exemptions are for
With the right software and reporting procedure MTD gives businesses:
Yes, as long as the company is VAT registered with a turnover of £85,000 and over (current threshold).