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My Tax Doc Accountants & Tax Advisors
My Tax Doc Accountants & Tax Advisors

08000 096441

My Tax Doc Accountants & Tax Advisors

What is Making Tax Digital?

Making Tax Digital (MTD) is a UK government initiative aimed at transforming the way individuals and businesses manage their tax obligations. It represents a significant shift towards a more digital approach to tax administration, making it easier for taxpayers to keep accurate records and submit their returns.

Mytaxdoc Accountants and Tax Advisors

The Tax System is Changing

HMRC aims to become “one of the most digitally advanced tax administrations in the world.” Making Tax Digital (MTD) is a fundamental shift in how the tax system operates, designed to transform tax administration so that it is:

  • More effective
  • More efficient
  • Easier for taxpayers to get their tax right

The government also hopes that these changes will help eliminate the tax errors that currently lead to over £9 billion in lost revenue each year.

You may have already heard about Making Tax Digital, commonly referred to as MTD. It has been widely discussed, with well-known cloud accounting providers advertising their solutions on television, while accountants have been discussing its implications for the past couple of years.

It’s Not Just for VAT – Registered Businesses Anymore

Making Tax Digital (MTD) for VAT marked the first stage in transforming tax filing and record-keeping. Since April 1, 2019, businesses must conduct their VAT accounting and filing using approved software, whether desktop or cloud-based, and submit returns digitally. If you’re VAT registered, you’re likely already familiar with these requirements and may have successfully adapted to the new rules—well done! However, it’s important to note that changes are coming regarding penalties, making compliance even more critical.

VAT Returns via Approved Software

VAT-registered businesses with a turnover above the VAT threshold (currently £85,000) must file VAT Returns using compatible software. This means direct submission through HMRC’s website is no longer allowed. Your accountant can still file on your behalf, or you can select HMRC-approved software.

Digital Record Keeping

Most VAT accounting records must be kept digitally for the statutory period—six years, or ten years for mini one-stop shop (MOSS) businesses. We’ll delve into what constitutes a digital record later in this guide.

Widespread Applicability

MTD for VAT applies to nearly all VAT-registered businesses in the UK, with very few exceptions. Opting out isn’t generally an option.

How Do I Prepare for Making Tax Digital?

Feeling a bit overwhelmed by the thought of Making Tax Digital? Don’t worry—MyTaxDoc is here to help business owners and sole traders navigate the transition smoothly and without errors. In fact, we’ll handle most of the heavy lifting for you!

Partnering with MyTaxDoc, you can transition to MTD with confidence, allowing you to focus on what you do best—running your business!

Ready to Transform Your Accounting Experience?

You entered your profession to pursue your passion, not to worry about taxes and compliance. Let’s start with a FREE discovery call. No obligation, just a chance to learn how much easier your financial management can be with MyTaxDoc.