Making Tax Digital (MTD) is a Government initiative affecting the way all taxpayers will deal with their tax affairs in the digital age. The aim of this new legislation, through increased automation and reduced human error, is to improve efficiency and ultimately to make the tax system operate in “real time “.
The next key stage of this new regime will come into effect from 1 April 2019 and will be compulsory for more than 1.2million VAT-registered UK businesses.
HMRC has advised that all other taxes, for businesses and individuals, will not come under the new regime until at least April 2020. There is though a growing expectation, arising from HMRC sources, that April 2020 will in fact be the date when quarterly reporting comes into force for most UK businesses.
Under MTD, most businesses, self-employed and landlords will need to keep track of their financial affairs digitally, using tools, such as software or apps, to keep records of their income and expenditure.