What is Making Tax Digital?
Making Tax Digital is a government initiative with the goal of reforming the United Kingdom's tax system by 2020.
MTD aims to make taxes simpler for businesses and individuals by using an online tax reporting system.
When will all this happen?
The first stage of MTD has already begun. HMRC has launched a private pilot for taxpayers who have voluntarily subscribed. Even if you didn't sign up for the pilot, you already have access to your digital tax account, where you can see all your tax liabilities in one place.
April
What are the benefits of MTD?
A better process
Eliminating annual tax returns means taxpayers don't need to cram 12 months worth of data reporting at the end of every year. With less data to sort through each return, you can effectively eliminate the risk of making errors.
Real-time view of your tax liabilities
Your digital tax account gives you a current view of your tax liabilities at any time, so you don't have to wait until the end of the year to find out how much you owe.
Fewer errors
Using an accounting app means you can detect errors as and when they happen, making your accounts more accurate and saving you the time of going through every paper receipt by hand.
Cloud convenience
All of your financial information will be stored in one system where it's easy to access. No need to trawl through several platforms to find the business records you're looking for.
How do I prepare for MTD?
Find an Accountant
A tech-savvy accountant can guide you through the processes you need to follow for MTD.
Move Online
Take your business accounts online. Start using an accounting app that works well with HMRC's digital platform.
Keep your data up to date
Whether you're recording transactions manually or using automated bank feeds, always keep your books current to make sure that you're able to meet HMRC's reporting requirements.
