Treasury reveals Making Tax Digital roadmap01/09/2020
The government’s Making Tax Digital (MTD) initiative is being expanded. At the moment, it only applies to businesses above the VAT threshold of £85,000. From April 2022, all VAT-registered businesses will have to comply with the initiative. Then from April 2023, it will also apply to taxpayers who file income tax self-assessment returns for business or property income over £10,000.
MTD won’t affect the level of tax that’s collected – just the way in which taxes are reported. The government is banking on the fact that digitalisation, which leads to more efficient record-keeping and greater transparency, will help it minimise avoidable mistakes. In 2018 / 2019, such mistakes came with a price tag of £8.5 billion.
However, the Treasury is also keen to hammer home the ways in which MTD can benefit businesses. In its recently updated MTD publication, it writes: “The move to digital integration will eliminate many of the existing paper-based processes, reducing errors and allowing businesses and their agents to devote more time to running their business.”
Jesse Norman, Financial Secretary to the Treasury, summed-up MTD’s appeal succinctly, telling reporters: “We are setting out our next steps on MTD […] as we bring the UK’s tax system into the 21st century. MTD will make it easier for businesses to keep on top of their tax affairs. But it also has huge potential to improve the productivity of our economy, and its resilience in times of crisis.”
Don’t worry yourself over MTD. At JW Hinks, we are more than capable of managing the transition to this new style of tax reporting for you. To find out how we can help your business get ahead of the curve, call our offices on 0121 456 0190.