Cardiff, UK - What Are the Changes to Making Tax Digital?

Since April 2019, UK businesses with a VAT turnover of more than £85,000 have been required to complete their annual tax returns digitally. Making Tax Digital (MTD) will apply to businesses that charge VAT and have a taxable turnover of less than £85,000 starting from 1st April 2022. Affected companies will receive letters informing them of the change if they haven’t already. Approximately 1.1 million small businesses in the UK will be impacted by the introduction of MTD when the changes are implemented.

At Hayvenhursts Accountancy Services we adapt our services to suit your business needs, whether it’s advice you need to be compliant with MTD or if you need other business accounting services one of our experts can help. We work with small, medium and large businesses throughout the UK and have an experienced and qualified team to support you.

What this means for small business owners

Small businesses currently reporting VAT through HMRC online or by post will be required to keep digital records and file VAT returns using certified software for their accounts as of 1st April 2023. If they don’t do this they risk incurring unexpected fines so it is really important to understand the changes and know what you should be doing so you are prepared.

Impacted businesses must begin making Tax Digital preparations ahead of the April 2022 deadline and by doing it before the deadline you won’t have to go back through your whole year’s accounts and submit them through one of the certified software. It’s never too early to put the right procedures and infrastructure in place, even for non-VAT registered firms and landlords, who have until April 2024 to comply with MTD for Income Tax (ITSA).

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Creating a Making Tax Digital Account

An important part of Making Tax Digital is having an online account with HMRC. This is to ensure your tax information can be securely stored and accessed by you and HMRC. You’ll need to sign up if you don’t already have an account. This can be done through the gov.uk website. Once you have an account, you can log in and view your tax information online. Your online account with HMRC is the key to complying with MTD. By having an account, you will be able to access your tax information easily and securely. If you do not have an account, you must sign up for one through the gov.uk website.

You can read our full checklist in our informative article here which will ensure you are compliant with making tax digital.

If you need any help or support with this subject or anything to do with your business finances and accounts, contact us today at 02920 777 756.