The Treasury has announced that Making Tax Digital (MTD) is to expand to all VAT-registered businesses from April 2022. Since April 2019, VAT-registered traders with annual taxable turnover above £85,000 have been submitting VAT returns through MTD. From April 2023, the Treasury expects MTD to cover all unincorporated businesses and landlords turning over more than £10,000.
This will mean that around four million unincorporated businesses and landlords with annual turnovers exceeding £10,000 a year will be drawn into MTD. This new urgency has been driven by the difficulty of implementing support measures for business during COVID-19 without comprehensive data.
Jessie Norman at the Treasury, said: “The COVID-19 pandemic has highlighted the need for a more flexible, resilient and responsive tax system that provides businesses and HMRC with more up-to-date information on businesses and their finances, and enables easier identification and better targeting of taxpayer support.”
Afford Bond Director, Paul Edwards, said: “A consultation will begin in the autumn on rolling out MTD for limited companies that pay corporation tax. As we all get back to a little normality, the long’ish lead time should allow businesses, landlords and agents time to plan, and gives software providers time to bring new MTD products to market, including free software for businesses with the simplest tax affairs.”
If your business needs advice on Making Tax Digital (MTD), please contact Afford Bond Wilmslow office T: 01625 416380 or Afford Bonod Nantwich office T: 01270 623731.