Yesterday, a new legislation was drafted by the UK Government to extend the Making Tax Digital rules to include all VAT registered companies above or below the threshold from April 2022 regardless of the value of their sales.
By April 2023 the Government also plan to extend the Making Tax Digital Rules to apply to any individuals filing self-assessment income tax returns for annual business or property income in excess of £10,000.
HMRC will expand their pilot service from April 2021 to allow businesses, landlords and individuals to test and prepare for the new regulations before they are required to abide to the rules.
There are currently 1.4 million taxpayers successfully signed up to Making Tax Digital for VAT. 30% of these individuals are VAT registered businesses with a turnover below the required threshold of £85,000.
Key facts on Making Tax Digital
- VAT registered businesses with a turnover on or above the £85,000 threshold are required by HMRC to submit their returns digitally.
- If you are below the VAT threshold you can join the Making Tax Digital service now voluntarily.
- VAT-registered businesses with a taxable turnover below £85,000 will be required to follow Making Tax digital rules for their first return starting on or after April 2022.
- Self-employed businesses and landlords with annual business or property income above £10,000 will need to follow the Making Tax Digital rules for Income Tax from their next accounting period starting on or after 6 April 2023.
Why is Making Tax Digital happening?
- HMRC wants to make the UK tax system the most efficient in the world.
- Currently they believe there is a short fall of £9 billion in unpaid tax.
- They believe that introducing a digitised system which will make it more effective, more efficient and easier for taxpayers to get it right.
- VAT was only the first stop, HMRC are now introducing Making Tax Digital for Income Tax and Corporation Tax in the near future.
What are the Bailey Group doing to help you?
There are currently 539 different Making Tax Digital registered programs and software’s that businesses can use to file VAT returns.
Bailey Group Chartered Accountants believe passionately in supporting their clients.
Whilst a lot of firms have decided to just offer clients a software with no additional support, Bailey Group have created a full service that provides their clients with a complete Making Tax Digital Solution.
The solution Bailey Group have created has been designed to meet all of their client’s needs, including:
- The ‘Scan Van’, a mobile scanning system that visits you or your premises and will digitise all of your receipts and invoices in under an hour. Click here to find out more information on the Bailey Groups Scan Van.
- Complete access to IRIS’ award winning cloud based KashFlow accounting software and IRIS Snap.
- Access to Bailey Groups mobile app to provide you with 24/7 support and an overview of your accounts, useful tips, hints and calculators.
Bailey Group has also undertaken significant digital transformation to ensure they can meet all of their clients Making Tax Digital challenges as well as future proofing the firm.
Over the next few months Bailey Group Chartered Accountants will be restarting their successful Making Tax Digital seminars online and offline for clients and non-clients.
If you would like any help or support from Bailey Group click here to visit their Making Tax Digital microsite which contains information on all thing Making Tax Digital and their innovative solution.