Making Tax Digital and How It Affects You

Making Tax Digital (MTD) is the government’s attempt to digitise the process of collecting tax information from taxpayers so they can speed up the process of calculating how much tax you owe.

After many different revisions and suggestions, the latest announcement is as follows:

• Only businesses with a turnover above the VAT threshold of £85,000 will have to keep digital records and only for VAT purposes. They will need to do so from 2019.
• Businesses over the VAT threshold will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.
• Making Tax Digital will be available on a voluntary basis for the smallest businesses, and for other taxes meaning that businesses and landlords with a turnover below the VAT threshold will be able to choose when to move to the new digital system.