New rules come into force on 1st April 2021
All VAT-registered businesses with turnovers of more than £85,000 now have until their first VAT return period starting on or after 1st April 2021 to put digital links in place for Making Tax Digital (MTD).
This will require over 1 million VAT-registered businesses to record and submit their VAT returns digitally with no interruptions, including manual transfers or adjustments.
These changes, which were delayed last year due to COVID-19, also see the introduction of a new penalty regime, for businesses that fail to keep digital records or maintain a complete digital journey.
This latest phase will be followed in April 2022 by further changes that will require all VAT-registered companies, regardless of their turnover, to switch to the MTD for VAT system that is currently in place.
A year later self-employed businesses and landlords with annual business or property income above £10,000 will need to report and record income tax digitally from their next accounting period starting on 6th April 2023.
The Government is also currently consulting on how the core principles of MTD can be applied to Corporation Tax.
it plans to hold a voluntary pilot from April 2024 to test the effectiveness of the system, before rolling it out more widely.
If you require assistance with the next phase of Making Tax Digital this year it is important that you seek advice at the earliest opportunity.
We are already working with many businesses, assisting them with their MTD compliance and reporting. To find out how we can help you and your business, please contact us.