Making Tax Digital is the name of the UK Government’s programme to digitalise the tax system. It places duties on individuals and businesses to keep digital records, use accounting and recording software that is compatible and submit quarterly returns.
Making Tax Digital’s aim is to make it easier for businesses to provide correct tax returns, integrate taxes with other processes, and increase efficiency.
Some businesses and individuals may be exempt, such as those businesses where it is not feasible for them to digitise their systems, i.e. due to age or location or because they fall below the threshold. Some businesses run by religious groups are also exempt.
Who is required to comply with Making Tax Digital?
Under the Making Tax Digital programme, if your business is registered for VAT, you must keep digital records and file your tax returns on software that is compatible with the Making Tax Digital programme.
For Income Tax, you need to follow the requirements of Making Tax Digital by 6 April 2026 if you have an income of more than £50,000 per year, or April 2027 if you have an income of more than £30,000.
If you think you will struggle to meet these deadlines, or general tax management on a digital system is something you think you will require support with, you may want to consider hiring professional help. Office support bookkeeping delivered by a professional can make this process simple and provide other benefits, like saving you time and stress, especially when it comes to return deadlines.
Bookkeepers Hereford will be able to assist you in setting up your Making Tax Digital compliant system. They will provide you with support to make it bespoke to your business, integrate it with your other systems and make sure your returns are HMRC compliant.
The final word
Although Making Tax Digital is designed to make tax more straightforward, moving to new systems can be challenging for your business. If at all concerned, don’t hesitate to contact a professional who can support your transition.