Making Tax Digital for Business went into effect on April 1st, 2019 for any VAT-registered enterprises with a turnover greater than the existing VAT threshold of £85,000.
Making Tax Digital aims to modernize the UK tax system by providing companies with a contemporary, simplified approach for keeping tax records and submitting information to HM Revenue & Customs (HMRC).
Small enterprises and individuals with a turnover over the VAT level of £85,000 will be the first to be impacted, since they will be forced to retain digital records for VAT reasons beginning in April 2019.
Making Tax Digital is designed to help you keep track of how much tax you owe – or how much you owe back – throughout the fiscal year.
By replacing paper-based accounting with digital tax accounts, you can ensure that the information HMRC has on file for you is accurate.
The new reporting option in Making Tax Digital will enable HMRC to review your tax information nearly quickly, eliminating human error from data entry.
Easier to comprehend HMRC predicts that taxpayers will better understand how much tax is owing inside the digital tax account, which will function similarly to online banking.
Making Tax Digital will make it simpler to communicate with HMRC online using webchats and secure communications.
In April of 2019, Businesses having a turnover greater than the VAT level (currently £85,000) are required to retain digital records, but exclusively for VAT reasons.
2023 – The Making Tax Digital initiative will be expanded to include all VAT-registered firms, self-employed professionals, and landlords who earn less than the VAT threshold.
Please keep the aforementioned dates in mind. – To get our newsletter and stay up to speed on the latest Making Tax Digital news, please click here.
Our video outlines what Making Tax Digital is, who will be affected, and when the changes will be implemented.
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