Digital Compliance
Making Tax Digital: What Your Business Needs to Know
By Emma Thompson
7 min read
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What is Making Tax Digital?
Making Tax Digital (MTD) is HMRC's initiative to digitize the tax system. It requires businesses to keep digital records and submit returns using compatible software.
Who is Affected?
MTD affects different businesses at different times:
- VAT-registered businesses with turnover above £85,000 (already mandatory)
- Income Tax Self Assessment (from April 2024)
- Corporation Tax (from April 2026)
Key Requirements
Under MTD, you must:
- Keep digital records
- Use MTD-compatible software
- Submit returns digitally
- Maintain digital links between different software packages
Choosing the Right Software
When selecting MTD software, consider:
- HMRC recognition and compatibility
- Integration with existing systems
- Cost and scalability
- Support and training available
Benefits of MTD
Despite the initial challenges, MTD offers several benefits:
- More accurate record keeping
- Reduced errors in tax returns
- Better financial visibility
- Streamlined processes
Preparing for MTD
To prepare for MTD:
- Assess your current record-keeping processes
- Research and select appropriate software
- Train your team on new procedures
- Test your systems before the deadline
Getting Professional Support
MTD can be complex to implement. Our team can help you choose the right software, set up your systems, and ensure full compliance with HMRC requirements.
Tags:
#Making Tax Digital#HMRC#Digital Records#Compliance