Making Tax Digital
Since 1st April 2022, all VAT registered businesses are required to follow the Making Tax Digital rules whereby they keep digital records and use software to submit their VAT return.
Making Tax Digital for Income Tax (MTD for ITSA)
From April 2024, this will affect any self-employed businesses and landlords with annual business and/or property incomes of over £10,000.
It is never too early to prepare for Making Tax Digital. The software is already available, some businesses are already using it as part of a live pilot test. If you would like to find out more or start voluntarily using the software, take a look here.
What is Making Tax Digital?
Making Tax Digital has been introduced by the government as part of it’s plans to make it easier for businesses and individuals to keep
on top of their affairs and to get their tax correct.
This will make tax more efficient and effective for taxpayers.
Under MTD for ITSA, you must send quarterly updates to HMRC within one month of each quarter end. You must also send an end of period statement by 31 January following the end of the tax year (so by 31 January 2026 for 2024/25), and make a final declaration by the same date.
Preparing for Making Tax Digital
There are a few steps you can take now which will help you to prepare for Making tax Digital.
Know your deadline
If you are a VAT registered business, your deadline was April 2022 which means your next VAT return needs to be using the MTD system.
If you are self employed or a landlord with an income over £10,000, the deadline is 2024. You can check the government website for more information about signing up.
Find a software
To be compliant you must use a software which is compatible with MTD for VAT. Gov.uk have provided a list of software for you to choose from: https://www.tax.service.gov.uk/making-tax-digital-software
A similar list for MTD for ITSA can be found here: https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-income-tax
Register for Making Tax Digital
You will not be enrolled automatically for MTD, you need to register on the government website using a Government Gateway ID. You can do that here https://www.gov.uk/government/collections/making-tax-digital-for-income-tax
Contact Essendon if you need support with Making Tax Digital.
Read more from this issue...
BookClub: They ask you answer by Marcus Sheridan
Learn how “They Ask, You Answer” has become the standard for Digital Sales and Marketing buy-in for thousands of organisations.
Continue reading…
A big warm welcome to Anna and Tracey!
Please give a warm welcome to two new members of the Essendon Accounts & Tax team.
Continue reading…It keeps on coming, doesn’t it?
Rising inflation, rising interest rates and an apparent lack of skilled labour just after we lick our wounds from Covid.
Continue reading…
Jake Stubbs on The Red Sofa
Jake gives his top tips on how to manage and understand your accounts better
Continue reading…
75 Years of Inflation – what can we learn?
We’ve all received a few wake-up calls in the last few months, and being reminded of any mix of the points below has been one of the greatest benefits of this whole Covid experience.
Continue reading…Standing out: how to find and own your position in your marketplace
Standing out from the competition isn’t just an issue for businesses in a crowded marketplace. If you’re competing in the same areas as your competitors, you may be facing an uphill struggle, wasting money on badly targeted marketing and missing out on an open position that is yours for the taking.
In some sectors not much will have been so different over the last 2 years, food needed to be delivered to grocery stores, bins needed to be emptied, laundry needed to be washed. Maybe, those strict ‘cleaning stations’ have been brushed aside now that the virus
has subsided.