Income tax reporting is changing: Everything you need to know about Making Tax Digital for Income Tax Self-Assessment (MTD ITSA)

What is Making Tax Digital (MTD)?

MTD has been introduced by Government to revolutionize the tax system in the UK.

The new system requires tax records to be kept and submitted digitally, using compatible cloud accounting software.

Over £8.5 billion in tax went unpaid between 2018 and 2019. The aim of MTD ITSA is to make filings more accurate by digitising submissions. This should help people better understand what tax they owe and reduce the deficit.

MTD for VAT has been around since 2019 and will become compulsory from April 2022.

MTD for Income Tax Self-Assessment is the next step in the scheme.

Then MTD for Corporation Tax will be implemented by April 2026.

Choosing Making Tax Digital Accounting Software for your Business

Making Tax Digital is a government scheme to digitise business taxation in the UK. It is being rolled out in phases, starting with businesses that pay VAT.

Businesses with a revenue above the VAT threshold must now file VAT returns digitally. And the only way to do this is by using compatible accounting software.

Cloud accounting software provider Xero has announced plans for its first office in the North of England, with a Manchester site set to open in November.

The New Zealand company, which already has offices in Milton Keynes and London, says that it will create up to 40 jobs in Manchester by early 2020.

Xero has experienced rapid growth in the UK. The online accounting company saw its UK subscribers increase almost 50% to more than 463,000 in the year to 31 March 2019.

FreeAgent Making Tax Digital MTD VAT CloudAccountant.co.uk

Making Tax Digital (MTD) for VAT is here and it means a number of important changes to the way that businesses file and report their VAT.

If you run a VAT-registered business with a taxable turnover above the VAT threshold of £85,000, you are required to keep digital VAT records using MTD-compatible software like FreeAgent or Xero.

The new rules took effect from April 2019. To make life easier for busy business owners, FreeAgent has introduced a range of updates and improvements to their VAT filing system.

In this blog post, we detail some new features and functionality that will make the VAT process quick and simple.

Choosing Making Tax Digital for VAT Software

There is less than a month left for VAT-paying businesses to prepare for Making Tax Digital (MTD).

MTD is the government’s flagship tax digitalisation scheme that will require all businesses to keep digital records and file and pay tax online.

MTD for VAT is the first stage of the digital roll-out and takes effect from 1 April 2019.

VAT: An introduction for small businesses

Registering for VAT can feel scary for businesses, but it is an essential part of growth. In this brief introduction to the tax, we give you all the most important information to help you grow more comfortable with the tax.

MTD Six Months On: 94% of Firms File on Time
Editor | 14 October 2019
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The biggest transformation to the tax system this century, Making Tax Digital (MTD) for VAT came into force for more than a million businesses in April.

Under the changes, VAT-registered businesses with a turnover that exceeds £85,000 need to keep digital tax records and submit their VAT returns to HMRC using compatible software like FreeAgent or Xero.

HMRC Last Warning on Making Tax Digital

HMRC has urged businesses that will be affected by Making Tax Digital to submit their first quarterly return using approved software by 7 August.

Under the new rules, which came into effect on 1 April, businesses with an annual turnover over £85,000 need to sign up to Making Tax Digital and submit a quarterly VAT return before the 7 August filing date.

Chancellor pushes on with Making Tax Digital

The Chancellor Philip Hammond has confirmed that he will push ahead with Making Tax Digital for VAT reforms in April, despite warnings that many firms are not ready for the change.

In the Chancellor’s written ministerial statement, he said that Making Tax Digital “is an important first step in this modernisation of the tax system to which the government remains committed.”

Why Spreadsheets are Holding Back Your Business

Is your business still using spreadsheets to manage its bookkeeping and accounts? It could be slowing you down and hurting your company.

Whether it is invoicing, checking figures or speaking to your accountant, spreadsheets more manual effort. Cloud-based accounting software automates many of these processes, making you more efficient

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