What Businesses Need to Know About Making Tax Digital
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What Businesses Need to Know About Making Tax Digital
Since its introduction in 2019, Making Tax Digital (MTD) has transformed the way businesses handle their tax affairs. Designed to make tax admin more efficient and easier for taxpayers, Making Tax Digital aims to prevent costly errors.
At BCS Accountants, this month’s blog offers a guide to Making Tax Digital. For more information, contact us on 01524 824111.
What is Making Tax Digital?
Making Tax Digital is a UK Government initiative that requires businesses and individuals to keep digital records and use compatible software to submit tax returns to HMRC.
The aim of this is to simplify the process of record keeping and modernise the tax system. It is ensuring information is recorded and transmitted to HMRC in real time.
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What is Making Tax Digital?
Making Tax Digital is a UK Government initiative that requires businesses and individuals to keep digital records and use compatible software to submit tax returns to HMRC.
The aim of this is to simplify the process of record keeping and modernise the tax system. It is ensuring information is recorded and transmitted to HMRC in real time.
How Does it Work?
All VAT-registered businesses have been following MTD since April 2022. This includes sole traders, limited companies, partnerships, charitable trusts, and landlords with at least one property in the UK.
As of 1st April 2024, the VAT registration threshold for businesses is £90,000. Individuals with a gross income from self-employment and/or property of more than £50,000 will need to use MTD for Income Tax from April 2026.
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What are the Benefits of Making Tax Digital for Businesses
Making Tax Digital for small businesses has a range of benefits. Embracing digital record keeping improves accuracy and long-term cost savings. Some of the advantages include:
Fewer Errors
MTD reduces the risk of human error by automating the recording and calculation of tax information. When you use compatible software, calculations are often done for you and entries are validated in real time.
This helps to prevent common mistakes such as data duplication or missing entries.
Better Financial Visibility
With real-time digital records, you have a clearer insight of your finances any time. Many MTD software have dashboards and reports to make it easier to monitor cash flow, track expenses, and plan for upcoming tax liabilities.
Time Saving
With automated tasks, you and your team can spend less time on paperwork. Submitting returns is quicker and less stressful when everything is stored in one place and updated automatically.
Increased Compliance
Staying compliant with Making Tax Digital reduces the chance of late or inaccurate submissions, which can lead to financial penalties. MTD software often has alerts or reminders, so you don’t miss deadlines.
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Contact BCS Accountants
For help and advice on Making Tax Digital, contact our team at BCS Accountants. We are based in Bolton-Le-Sands, near Carnforth, but cover Morecambe, Lancaster and Kendal. Call us on 01524 824111. Alternatively, send us a message via our contact form and we’ll be in touch.
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Contact BCS Accountants
Address:
BCS Accountants & Tax Consultants
Border House, 60 Main Road
Bolton le Sands, Carnforth
Lancashire, LA5 8DN
Contact Details:
Tel: 01524 824111
Fax: 01524 825327
Email: enquiries@b-c-s.co.uk
