MTD has been pushed back and back over the last couple of years and with the effects of Covid-19 still very much at the forefront of everyone’s minds, this will inevitably continue to take a back seat.
Having said this, whilst at the moment only compulsory VAT registered businesses are affected, HMRC have stated that from April 2022, even those with turnover below £85,000 will need to be MTD compliant. The main change is that VAT records are required to be stored digitally and sent to HMRC using MTD compatible software. For those already reporting under MTD the ‘bridging software’ option will not be available after April 2021.
This is an important time to consider using an online accountancy software, having real time information will lessen the burden of MTD reporting dramatically.
Under MTD it is proposed that the Self-Assessment tax return will be replaced by five new reporting obligations made during and after the tax year. This is due to commence on 6 April 2023. Updates will need to be sent to HMRC quarterly showing your business income and expenses. At the end of the accounting period you will then need to finalise the business income and expenditure in a declaration, this will be similar to the current annual Self-Assessment tax return.
Contact the team at Perrys to ensure your business transitions are as smooth as they possibly can be.
Isobel Lewis ACCA, Manager