In the 2015 budget, the government outlined making tax digital (MTD). This is a result of over £8 billion a year in tax lost from avoidable taxpayer errors. this being put in place to try and avoid these errors from occurring. With this now set to come into force in 2020, here are a few key points you need to know to get yourself prepared.
Who will be affected?
- – Businesses
- – Anyone who is self-employed
- – Landlords
When will they need to start using the digital service from?
- – *April 2018 for income tax and National Insurance contribution (NICs) purposes if your turnover is over the VAT threshold
- – April 2019 for income tax and NICs purposes if your turnover is below the VAT threshold.
- – April 2019 for VAT purposes for everyone who is VAT registered.
- – April 2020 for Corporation Tax (CT) purposes for everyone who pays CT*
Although, those listed above who have turnovers under £10,000 per year through self employment are exempt from these requirements.
Those in employment who have a secondary income of more than £10,000 per year through self employment or through property will be required to use the digital service.
*Source – https://www.gov.uk/government/publications/making-tax-digital-for-business/making-tax-digital-for-business