Making Tax Digital is an initiative set by the government that promotes a vision to make the digital tax system easier and simpler for businesses and individuals who want to stay on top of their affairs efficiently.
Making Tax Digital means tax administration will be more effective and easier for taxpayers to deal with by making the system fully digital. Some people think this is a great approach since technology has adapted so much throughout the years.
If you’re self-employed, a landlord or a business owner, you’ll be compliant by law to keep track of a digital record regarding your expenses, accounts and income tax using an MTD-compatible software system.
For many, keeping track of tax records is something that could be done independently without the help of an accountant. With time moving forward, Making Tax Digital could prove to be difficult for a number of business owners who are used to the traditional ways of recording.
It’s crucial that as accountants, you’re prepared for an increase in client calls and queries – something we are used to at LJS Accounting Services.
If you’re confused about the changes regarding Making Tax Digital, we’ve put together a timeline to explain how the initiative will plan out.
Making Tax Digital introduced a rollout plan back in 2016. Now, approaching 2023, we’re going to take a look back at past milestones:
- In April 2017, the private rollout started.
- Between July to December 2017, taxpayers were able to see an overview of their liabilities all in one place. HMRC also began a private pilot of Making Tax Digital for VAT.
- During Spring 2018, a live pilot of Making Tax Digital for VAT starts.
- In April 2019, businesses that have VATable sales above the threshold need to keep records and submit their digital tax returns through accounting software.
- In April 2021, things begin to change even further. HMRC announced that they are no longer going to accept VAT submissions that have been made using an XML facility.
- A year after HMRC stopped accepting VAT submissions through certain facilities, all VAT-registered businesses were required to use MTD-compatible software to keep track of their financial record before sending them to HMRC.
- As for the future, Making Tax Digital for income tax will eventually be introduced. Both self-employed businesses and landlords with income from properties above £10,000 to stay in compliance with the rules come the 6th of April 2024.
- By April 2025, the new rules will be that partnerships with individuals will also have to stay in line with the rules for Making Tax Digital. Although it’s not been announced, limited liability partnerships that have corporate partners will also be required to join at a further date.
- From 2026 onwards, Making Tax Digital will be expected to be part of the initiative.
How LJS Accounting Services Can Help
Having provided the highest quality of services for 12 consecutive years, LJS Accounting Services are a trusted firm with an experienced, friendly team who are committed to striving for excellence.
We get things done efficiently when it comes to our client’s needs, regardless of what they might be. Making Tax Digital means you’ll be required to use compatible software, something our accountants have a vast amount of experience in.
Having worked with small businesses, private limited companies and sole traders, we know first-hand how much of a positive impact it has when you hire an accountant to return your tax and take care of your financial needs.
Having someone take care of your accounts means you can allow yourself to dedicate more time to other aspects of your business.
If you’re interested in hiring a reliable, hardworking accountant, look no further than LJS Accounting Services – our services are available to read through via our website. Based in the UK, we’re able to accommodate a wide range of individuals from numerous areas across the country.
With tax being made digital and changes being introduced up until 2026, now is the perfect time for your business to consider the benefits of having an accountant keep your finances updated.
For more information or a free consultation, call a member of our team from either our Liverpool, Wirral or St Helens office – our contact information is on our website.
Alternatively, drop us an email at email@example.com. We look forward to speaking with pre-existing and future clients.