HMRC has devised a strategy named “Making Digital tax” or MTD that will affect both individuals who are sole traders and limited company businesses. The Purpose of MTD is to reduce errors by real time tax filing, which means waiting for a whole year to know how much tax return you need to pay will be a thing of the past. However it also means that an individual sole trader or limited companies business will have to make multiple tax payments throughout the year to keep it real time.
The pilot MTD scheme has already begun in April 2018 however businesses will not be required to use MTD until April 2019. certainly the next question in everyone’s mind will be who is going to be affected by the MTD? well, the criteria is pretty simple if you are VAT registered already or you have a turn over above the VAT threshold than from April 2019 you will be required to use digital tax submission. It is important to note that it is not just VAT returns that will be required to be submitted using digital tax but everything including business tax return, NIC’s, payroll and pensions. MMR accountants is in the process of getting information together for our clients who will get affected by MTD from April 2019.
Surely people will have more questions and concerns about how it will affect them on individual or business level. Please feel free to get in touch with us we will try our best to answer your queries. More details on MTD are available on HMRC website if you are interested to read the full details.