The Treasury have announced the next phases of the Making Tax Digital (MTD) roadmap covering VAT, income tax and corporation tax. This is the latest step of the long term plan to reform and digitise the UK tax system.
From April 2022 MTD for VAT will be extended to all VAT registered businesses, including those who are voluntary registered below the VAT threshold of £85,000. All VAT registered businesses will therefore be required to keep digital records, submit their VAT returns through compliant software and maintain digital links between their underlying accounting records and their VAT return submission.
For those businesses that are already required to keep digital records and submit their VAT returns under MTD, the current soft landing period for full digital links will end as previously announced for periods starting from 1 April 2021.
From April 2023 MTD will also apply to taxpayers who file self-assessment tax returns for businesses or property income over £10,000 annually. Businesses and landlords will need to submit a quarterly summary of their business income and expenses to HMRC using MTD-compatible software.
The government have also announced it will consult this Autumn on how MTD can be extended to include Corporation Tax.