Making Tax Digital (MTD) – rollout deadline extension

Making Tax Digital, or 'MTD' is the UK’s biggest tax shake-up in a generation. HMRC is moving towards a fully digitalised tax system, which will apply to a wide range of taxpayers, including most businesses, self-employed professionals, and landlords. This ‘new and improved’ tax system will require the majority of business owners to maintain digital records on compatible software.

The first group to be affected will be VAT registered businesses above the VAT threshold (£85,000), however, the timeline for roll-out for some has been extended from 1 April 2019 to 1 October 2019. This is following HMRC’s pilot testing, where it became apparent that certain businesses found the process more complex.

If a business falls within one of the groups detailed below it will have an additional 6 months before it is required to be MTD compliant, but despite the extension, we would strongly urge all businesses to equip themselves and become MTD compliant as soon as possible.

1.    Trusts

2.    ‘Not for profit’ organisations that are not set up as a company

3.    VAT divisions

4.    VAT groups

5.    Public sector entities required to provide additional information on their VAT return (Government departments, NHS Trusts)

6.    Local authorities

7.    Public corporations

8.    Traders based overseas

9.    Those required to make payments on account

10.    Annual accounting scheme users

From April 2020, it is expected that the Government will introduce changes for businesses who pay corporation tax and we believe additional taxes will be introduced to the regime from there on out.

MTD will involve fundamental changes in the way we submit information to HMRC, and it is prudent that you review the way in which your business works, to ensure a smooth transition to a digital future.

We are advising our clients to see this new regulation as an opportunity by moving your account onto a cloud accounting software. This offers many benefits, including being MTD compliant.

Find out more about Making Tax Digital and the benefits of cloud accounting software:

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