Finance Article - August/September 22
Your Questions Answered by TaxAssist Accountants
When will Making Tax Digital affect my business?
I run a small, limited company but also rent out a couple of properties and I’m confused about whether Making Tax Digital (MTD) applies to me. I think the VAT returns for my company are already being submitted using MTD, but I’m not certain about my income tax and also corporation tax and I don’t want to miss any deadlines.
Making Tax Digital (MTD) for VAT was first introduced in April 2019 for businesses whose turnover was above the VAT threshold, so that would explain why you already submit your VAT returns using MTD. Making Tax Digital for VAT was extended to businesses with turnover below the threshold in April 2022.
Surprisingly Making Tax Digital for Corporation Tax for your company is still a little way off and we don’t expect it to be introduced until 2026 at the earliest, so at the moment there is no risk of missing any MTD deadlines in respect of your company’s corporation tax obligations.
Making Tax Digital for income tax was due to be introduced next April (2023) for rental businesses and the self-employed with turnover above £10,000, but it has been deferred until April 2024. You therefore have some time to prepare and make the move over from keeping manual records to keeping your records electronically so that quarterly returns can be submitted.
Information supplied by Cheryl Hopkins, Chartered Certified Accountant, TaxAssist Accountants. Advice shared in this article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayers’ circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take, action, as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.