Making Tax Digital
By now we are sure that you’ve heard the term ‘Making Tax Digital’ – it’s been the hot topic for many businesses over the past few years.
MTD is the idea that all business transactions will flow electronically to HMRC with the click of a button, enabling HMRC to estimate tax liabilities more quickly and more efficiently.
MTD for VAT was the first tax to introduce MTD. From 1 April 2019 all VAT registered businesses with a taxable turnover greater than £85,000 had to comply with MTD for VAT. As of 1 April 2022, MTD for VAT will become mandatory for all other VAT registered businesses.
As most dental practices are not VAT registered - what does that mean for you?
Unless you are VAT registered then you do not need to take any immediate action. However, MTD will be rolling out further and in April 2024 is expected to be introduced for Income Tax.
2024 - MTD for Income Tax will require all sole traders (and landlords) with income above £10,000 per year to electronically submit quarterly updates to HMRC detailing their income and expenditure. At the end of the fourth quarter all businesses will be required to submit a final electronic declaration.
2025 - MTD for Income Tax will be brought in for partnerships.
2026 - MTD is expected to be brought in for companies.
What should I be doing now? In anticipation of the expected arrival of MTD for Income Tax you should ensure that your accounting software is MTD compliant. Some cloud-based accounting software such as Quickbooks and Xero are already MTD compliant for VAT and from April 2024 will be compliant for Income Tax. If you do not use accounting software or are not using MTD compliant software, then you may want to consider doing so – please get in touch with us now to discuss the options available to you.
Over the coming months we expect this to really take off and that we will be assisting hundreds of our clients with their MTD requirements, so if you think you may require some guidance or are interested in switching to MTD compliant software – please take action now by contacting Emma Hind or Rob Oliver on 01768 864466 or email hello@doddaccountants.co.uk.
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