Making Tax Digital

The world of tax is changing for all businesses and all individual tax payers
By 2025 there will be no tax returns and all tax information will be collected digitally by HMRC
Now is the time to plan and prepare for MTD and we are here to help you
  • IMG_0370
    MTD Vat Reporting
    Since April 2019 most businesses have had to use Functional Accounting Software and submit Vat returns direct through their accounting software
    We can help you make this very straight forward
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    Dafferns, your digital tax advisor
    Controlling, sorting and making sense of all the information HMRC collect about you digitally

    Jackie Whitehouse - Personal tax client advisor
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    The end of the tax return by 2025?
    MTD means the end of the tax return and the end of the 31 January deadline. But in its place will be quarterly reporting and the need to have up to date accounting information all the time
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    Dafferns, experts on MTD
    We are here to make MTD a simple and hassle free process for you and your business

    Megan Hall - Personal tax assistant
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    All accounts will be on the cloud
    The quarterly submission of accounts information to HMRC by sole traders, partnerships and companies will mean the end to out of date desktop software. Cloud accounting is the future
  • Margaret Hopkins
    Helping you with cloud accounting for MTD
    We can help you set up a simple efficient cloud accounting system to ensure your small business can comply with MTD
    Margaret Hopkins - Small Business accounts advisor

A huge change in the UK tax system, started in 2019

Over the next few years all personal and business tax information will be collected digitally
We are here to help you get ready for MTD

What you need to know about MTD

What is Making Tax Digital?

Making Tax Digital (MTD) is a government initiative to modernise HMRC’s tax system, with the aim of making the whole process of administrating tax simpler and more efficient. All of your tax information will be in one place (your digital account) and you will be able to pay tax based on your business activity during the year and you can upload and update your tax account in real time.

Will it affect me?

If you own a business, you are self-employed or a landlord and you pay income tax, national insurance, VAT or corporation tax then it is quite likely you will be affected. This means you will be required to keep track of your tax affairs digitally using MTD compatible software, and to update HMRC at least quarterly via your digital tax account. Eventually this will abolish the annual tax return. This will be the law and there will be penalties for non- compliance.

What do I have to do?

You will need to open and log into your digital account. Everyone will be allocated one through the current Government Gateway. Then you will need to ensure your accounting software can update this account at least quarterly. For most businesses this means a move away from desktop and onto cloud based accounting software.

You are required to maintain your business records electronically and to provide updates of information to HMRC. You will be prompted to send summary updates directly to HMRC – quarterly updates will need to be submitted within a month of quarter end, and an end of year activity report will be due within nine months of the end of the accounting year.

As your accountant and tax agent, we can advise you on the software you will need and how to comply with the new quarterly reporting requirements.

When is all this happening?

MTD starts in anger in April 2019 for Vat registered businesses, but will quickly roll on to all businesses and individuals by 2021 / 2022.

Mandatory Vat reporting from April 2019

From April 19 Vat registered businesses over £85k TO must use “Functional Accounting Software”

– The law is changing, so doing nothing is not an option
– Manual or Excel records are no longer acceptable
– Your accounting software has to talk directly with the Vat Gateway

Xero or Sage is the answer and we can help you fix the problem

MTD - The Clock is ticking