What is making tax digital?
Making Tax Digital (MTD) is an upcoming piece of legislation from HMRC where the majority of businesses, including sole traders, will have to send quarterly updates to HMRC of their income and expenditure via online accounting software’s such as Quickbooks and KashFlow.
For businesses registered for VAT with a taxable turnover above the VAT registration threshold of £85,000 will need to keep VAT records digitally and file their VAT returns using MTD compatible software. This will start from their first VAT period starting on or after 1 April 2019.
Businesses with a taxable turnover below the VAT threshold will not have to operate MTD, but can still choose to do so voluntarily. Those earning over £10,000 annually but are under the VAT threshold will join MTD from 1st April 2020.
Please take a read of the HMRC’s introduction for more information about MTD at https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat
