HMRC is phasing in its landmark Making Tax Digital (MTD) regime, which ultimately requires taxpayers to move to a fully digital tax system, it started with MTD for VAT in 2019 and will eventually include MTD for Income Tax & Self-Assessment and Corporation Tax too.
HMRC have confirmed that all VAT registered businesses, to extend to those registered businesses under the threshold (currently £85,000), will be required to be compliant for VAT filings from April 2022.
MTD for Income Tax & Self-Assessment has been delayed by 12 months and will now commence in April 2024. This will be for individuals with self-employment income and/or gross rental income from property greater than £10,000. They will need to report their business income quarterly with a final declaration at the end of the year. This is intended to replace the current self-assessment system.
General Partnerships are to be included from April 2025 whilst Corporation Tax is not expected until at least April 2026.
Your BrighterThinking Next Steps
“This is mandatory over the coming years for those business and individuals mentioned. Most businesses are already compatible through MTD for VAT but if not, then our advice would be to digitise as soon as you can, do not wait for your ‘enrolment date’.
The benefits of cloud accounting and software can be huge, saving lots of time and costs and you will be ready and compliant for when your time comes. Your advisor at Menzies can have visibility too for more proactive advice to help you and your business.”Oliver Finch – Outsourcing Partner
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Menzies Private Client Team
Personal tax planning can be complex. We would always recommend that you seek professional advice when undertaking a review to ensure all changes are processed and managed effectively. Please do speak with your Menzies contact who will be delighted to meet with you to discuss ideas, opportunities and the appropriate action.