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Digital Tax Specialists on the Wirral, Liverpool & Chester
Making Tax Digital is set to make the tax system more effective and user friendly by replacing paper-based bookkeeping with digital tax accounts. HMRC will also be more available via web chats and online forms allowing taxpayers to more easily check the information HMRC holds about them is 100% correct.
The first phase of MTD has already been implemented and has now covered all VAT-registered businesses, it requires these businesses to keep digital VAT records and submit quarterly VAT returns to HMRC using MTD-compliant online accounting software. If you have any questions regarding MTD for VAT-registered businesses, our team will be happy to help.
What we do for you:
Using compatible software:
Using online accounting software, such as our recommended partner, Xero, allows your business to keep the digital records that are required by MTD. The software saves your business’ financial information to show your current tax data in real-time. This can help you avoid possible errors, and as your Accountants, we can access the software to submit updates directly to HMRC on your behalf.
Your Business tax account:
As part of the update, individuals, sole traders, partnerships, and limited companies have improved access to an online business tax account. It can be used to check your tax position on taxes, including Self-Assessment, VAT, PAYE and corporation tax.
Making Tax Digital for Income Tax Self-Assessment:
Making Tax Digital for Income Tax Self-Assessment (ITSA) has been delayed as an impact of the Pandemic; current dates for its introduction are listed below:- Sole traders and landlords with business or property income above £10,000, MTD for ITSA will start from April 2024.- For general partnerships with an income above £10,000, MTD for ITSA will start in April 2025. To determine if the £10,000 threshold for MTD for ITSA applies to you, please get in touch with a member of our team.
Tax Year End:
At the end of your accounting period, we will finalise your business income, make any relevant adjustments and confirm to HMRC that your accounts are complete and correct. At the end of the tax year, a final declaration will be filed for you, which replaces the previous Self-Assessment tax return.
Although reporting income tax liabilities is set to change, the timing of tax payments will remain the same. The current system of payments on account and balancing payment by 31st January / 31st July is expected to remain.
Making Tax Digital for Corporation Tax:
The government has said MTD for corporation tax (CT) will not be introduced before 2026. The change will affect incorporated businesses that pay corporation tax. Full details have yet to be confirmed, but as with the other rules, it is expected that affected companies will need to keep digital corporation tax records and use MTD-compatible software to submit quarterly updates and annual corporation tax returns.
Hear from our clients
“I would have no hesitation in recommending Lewis Smith Accountants in providing an all-round taxation and consultancy service. I am delighted to say the innovative approach and positive advice is refreshing, helping maintain the confidence that we are minimising tax liabilities."
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