01785 243276 admin@howardsca.co.uk

Making Tax Digital (MTD) is here to stay. A major change occurs in April 2022. At this point, all VAT-registered businesses must submit records digitally. Subsequently, MTD will apply more widely across the UK tax system. MTD for self-assessment income tax is next. Later, MTD will encompass corporation tax. 


Access up to date information 

There are key benefits to MTD. Using the approved software simplifies record keeping. It also means that up to date information is readily available. So, it’s easier and quicker for businesses and their advisers to make key decisions. 


Disadvantage of deregistering 

Of course, not everyone is keen on MTD for VAT. Some businesses will seek a way to avoid it. Certainly, deregistering is an option. However, you can’t then reclaim input tax on purchases. In general, SMEs are slightly better off remaining VAT-registered.  


MTD for self-assessment income tax  

The other point to make is that MTD will have a wider roll out. MTD for self-assessment income tax is on the horizon. A voluntary pilot programme is currently underway. Then, the new regime comes into force from April 2024. The rules apply to those whose combined general and property income exceeds £10,000. Sole traders and landlords will be required to make quarterly updates to HM Revenue & Customs (HMRC). This change will affect general partnerships from April 2025. 


MTD for corporation tax  

The Government initiated a consultation about MTD for corporation tax. Businesses will need to submit quarterly updates and an annual return. A pilot is scheduled for April 2024. It’s unlikely that the new rules will come into force before 2026. 


Free, no obligation consultation 

We appreciate that some businesses will have questions about MTD. That’s why we’re offering a free, no obligation consultation. Contact our team on 01785 243276.