Making Tax Digital extended to all VAT registered businesses
22 July 2020| CATEGORIES: Making Tax Digital, VAT| TAGS: Making Tax Digital, MTD
The government has published a future roadmap for the extension of Making Tax Digital, impacting businesses below the VAT registration threshold.
The roadmap, announced on 21 July 2020 within the government’s report Building a Trusted, Modern Tax Administration System, sets out the next steps for Making Tax Digital (MTD) for VAT and income tax.
Background
In April 2019, the government rolled out MTD for Value Added Tax (VAT). Businesses with a taxable turnover above the VAT registration threshold of £85,000 are now required to maintain digital records and send quarterly updates to HMRC through compatible software.
The future roadmap
July’s announcement included the following:
- From April 2022, MTD for VAT will apply to all VAT registered businesses, regardless of turnover.
- Income Tax Self Assessment (ITSA) will be introduced from April 2023 for unincorporated businesses and landlords. The Government will consult later this year in relation to corporation tax.
On the VAT update, Tina Riches, Chair of the joint CIOT and ATT Digitalisation and Agent Services Committee, said:
“The extension of MTD for VAT to voluntarily VAT registered businesses was the logical next step. Around 300,000 such businesses are already signed up for MTD for VAT, and 1 April 2022 gives the remaining 700,000 or so businesses time to get ready for the change.”
Please get in touch with us for further information and help on preparing for the changes.