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What is Making Tax Digital?

Tax returns will have to be submitted digitally through an MTD-compliant software. Tax submissions by post or through HMRC's website will be phased out. All business-related transactions will have to be recorded digitally using MTD-compliant software or apps.

April 2019 VAT (phase 1)

Who’s affected? VAT registered businesses with turnover above the VAT threshold (currently £85,000 excluding VAT).

How?

  • MTD-compliant software or apps will have to be used to keep a digital record of VAT transactions
  • MTD-compliant software or apps will have to be used to submit VAT returns
  • Submitting VAT returns using HMRC’s own VAT online services (currently accessed by logging on to HMRC’s site) will no longer be possible

April 2020 VAT (phase 2)

Who’s affected? The remaining VAT registered businesses – those voluntarily VAT registered with VAT-able turnover under £85,000.

How?

  • MTD-compliant software or apps will have to be used to keep a digital record of VAT transactions
  • MTD-compliant software or apps will have to be used to submit VAT returns
  • Submitting VAT returns using HMRC’s own VAT online services (currently accessed by logging on to HMRC’s site) will no longer be possible

April 2020+ Corporation Tax & Self Assessment

Who’s affected? Sole-traders, partnerships, landlords and trading companies. (The start date will be confirmed by the government following the successful roll out of Making Tax Digital for VAT.)

How? It's likely that:

  • MTD-compliant software or apps will have to be used to keep a digital record of financial transactions
  • MTD-compliant software or apps will have to be used to submit quarterly updates to HMRC for both income and corporation tax purposes

Quickbooks: 8th Oct 2018 15:49:00