Making Tax Digital (MDT) is the government’s initiative to digitise our entire tax system.
With HMRC aiming to become one of the most digitally advanced tax administrators in the world, MDT is making fundamental changes to the way our tax system works, making it more effective, more efficient, and easier for individuals and businesses to get their taxes right.
Here’s a rundown of what to expect from MDT.
Who will be affected?
Businesses that are VAT registered and have an annual turnover above the £85,000 VAT threshold will be affected by MDT.
What needs to be done?
All business that will be affected must:
Browse this list if you are unsure whether your software is compatible for Making Tax Digital.
When is it happening?
The first stage of MDT becomes mandatory for all businesses in England and Wales on 1st April 2019, however according to ICAEW, 40% of businesses who are about to be affected by MDT are still not aware of the scheme.
The exception to this date was announced in October 2018 by HMRC who stated that they have “listened to concerns and will give a small group of customers with more complex requirements a further 6 months to prepare”.
This 6-month deferral applies to businesses which fall into the following categories:
For more advice on Making Tax Digital, and for videos and webinars, visit the government website.