Making Tax Digital – what you need to know ahead of 2022-23

On 1 April 2019, HM Revenue and Customs (HMRC) introduced its new digital tax initiative – Making Tax Digital (MTD) – and its first phase, MTD for VAT.

The purpose of MTD is for self-employed individuals and small businesses to complete their tax returns and records digitally, intending to make it easier to keep on top of their tax affairs accurately. With this in motion, HMRC hopes to go paperless altogether.

MTD for VAT began in 2019 by using digital records and accounting software to complete VAT tax returns.

Upcoming deadlines for MTD

HMRC is introducing MTD gradually and currently only affects VAT-registered businesses with a taxable turnover above the £85,000 VAT threshold.

From April 2022

  • All VAT-registered businesses need to comply with MTD for VAT
  • MTD applies to taxpayers who file Income Tax Self Assessments for business or property income of more than £10,000 a year

From April 2023

  • Self Assessment taxpayers need to comply with MTD for Income Tax
  • MTD applies to taxpayers who file Income Tax Self Assessments for business or property income of more than £10,000 per annum

MTD for VAT: keeping records 

HMRC says the digital records you need to keep for MTD for VAT include:

  • Company name and contact details
  • VAT number
  • Rate of VAT on any supplies made and received
  • Time of supply
  • VAT returns – any changes made
  • Reverse charge transactions
  • Daily gross takings
  • Details of any schemes used

Ensuring you are up-to-date and complying with all things relating to MTD can be challenging. Therefore, it is vital to seek support. Find out how we can help you today by contacting us here.

Subscribe
Sign-up to receive our news and updates by email

    I am happy to receive newsletters and promotional information from AGS Accountants.

    If you would like to see full details of our data practices please visit our Privacy Policy.