Making Tax Digital
Ensure your business is VAT compliant with Reckon One’s MTD software.
What is Making Tax Digital?
Making Tax Digital (MTD) is a key HMRC initiative that is designed to make sure the UK tax system is more effective, more efficient and easier for taxpayers to get their tax right and keep on top of their affairs. It changes the way UK businesses, accountants and bookeepers do their taxes.
MTD for VAT makes it mandatory for VAT-registered businesses to keep records and submit VAT returns digitally using HMRC compliant software such as Reckon One.
When does Making Tax Digital start?
MTD became mandatory from 1 April 2019 for all VAT-registered businesses that met the threshold.
From April 2022, Making Tax Digital for VAT will apply to all VAT-registered businesses, including those voluntarily registered for VAT. Originally, MTD for VAT was a legal requirement only for VAT-registered businesses over the registration threshold which was £85,000.
Other components of MTD, such as income tax and corporation tax, have been placed on hold until April 2020 at the earliest and further details will be confirmed by HMRC.
How will MTD impact my business?
MTD is really not as scary as it sounds. If your business has a taxable turnover more than the £85 000 VAT threshold, all you (or your accountant) need to do is record your taxable records and submit your VAT returns through MTD-compatible software – like Reckon One.
The introduction of MTD brings a great opportunity for you to streamline your accounting process. Keeping records and filing tax digitally is a great step forward for your business, giving you the chance to regularly check income, expenses and profit.
Businesses below the VAT threshold can choose whether they adopt MTD or continue to use the HMRC online portal. This may be the perfect time to switch to Reckon One and be ready for any further changes to digital requirements from April 2020 onwards.
Reckon is supporting Making Tax Digital
Reckon has worked closely with HMRC to be on their list of ‘software that’s compatible with MTD for VAT’.
Our Reckon One online accounting software has VAT functionality to ensure you are MTD compliant, with no extra cost involved. If you are currently using Reckon One, your business will comply with MTD for VAT record keeping requirements.
You can also read our Making Tax Digital update article here.
Become Making Tax Digital compliant with Reckon One
Reckon One is HMRC-recognised for VAT and makes Making Tax Digital a breeze.