Making Tax Digital – What You Need To Know!
Making Tax Digital (MTD) is a new initiative that could transform the tax system. Why do you need to know about it? Because it could save millions of individuals and business owners time and a great deal of effort. Let’s take a look at what you need to know.
Jumping right in, what is Making Tax Digital?
Making Tax Digital, MTD, is the government’s plan to make it easier for individuals and businesses to get their tax right and keep on top of their affairs. MTD will roll out in April where we hope to see the tax system become effective and a whole lot simpler!
MTD will ensure everyone manages tax and personal information easily digitally.
The government is hoping that MTD will simplify the tax process for individuals and businesses. The streamlined process is thought by many as the right move forward and is seen as the modern approach to tax.
This is what the government had to say about the process: “Every individual and business now has access to their own personalised digital tax account and these are being regularly expanded and improved.” – GOV.UK.
Why has the change come around?
The main ambition is to modernise their tax administrations. Individuals and business owners no longer need to give information it already has or can gain from elsewhere.
Digital tax accounts will give customers more control and power, whilst allowing them to see the information that HMRC holds; you’ll be able to check these at any time.
The four key foundations of MTD:
- Better use of information
- Tax in real time
- A single financial account
- Interacting digitally with customers
These four foundations show the key improvements to the tax system that MTD could make.
Our thoughts on MTD
We believe MTD is a great opportunity for the tax system to be completely transformed. It could make HMRC the world’s most advanced and efficient tax administration process. We praise the move as it means that tax should be easier and allow us and businesses to spend more time on key business functions and less time arranging tax.
MTD could mean:
- Fewer errors in VAT returns through digital records.
- More help for clients to meet their VAT obligations.
- A practical service with easy access to live client data.
MTD is not only great for businesses but also for us accountants & bookkeepers.
Do remember that businesses will not be able to use MTD until April 2019 so there’s still some time yet to get your head around it.
Change isn’t always easy but Making Tax Digital is something we must all embrace.
Got some MTD-related questions?
We’d love to answer your questions about Making Tax Digital and hear your view!
