The government has recently announced Making Tax Digital legislation will extend MTD to low turnover businesses and eventually to the realm of income tax.
Presently, only businesses with an annual turnover in excess of £85,000 must file returns using approved software and keep a digital record of transactions. However, from April 2022, all VAT registered businesses will have to comply with MTD procedures.
Then, from April 2023 MTD will be massively extended to a taxpayer’s income tax affairs. Any person with business income or property letting income, with a turnover of more than £10,000 will have to follow MTD procedures. No detail has yet been released as to what this involves but there has been mention of free software for those with the simplest tax affairs.
This will have a big impact on those clients with modest turnovers and currently filing tax returns under self assessment. Watch this space for further information!
If you have any questions, please contact a member of our Tax Team on 01904 655202 or email firstname.lastname@example.org.