MTD – The Paper Exterminator

/ Accounting, Government, Tax, VAT

Author: Henry Ejdelbaum

Tags: accounting, MTD, Tax, VAT

Today, it seems like everything can be done digitally. You can write emails and have phone calls to communicate with someone miles away. You can use your phone to manage your to-do lists, your bank accounts and even the heating in your home. You can even avoid the physical world at work – many jobs can be performed on your computer from home.

There is, however, one big exception to this world of digitisation – Taxes. Despite modern filing systems and digital storage, taxes still have physical papers and manual forms.

Surely, you ask, HMRC must be at least trying to modernise? The answer, thankfully, is yes. Next April, the Government’s new “Making Tax Digital” (MTD) initiative comes into effect. Under MTD, the processes for filing taxes will be moved bit-by-bit into a truly digital format, finally bringing the tax system into the new millennium. MTD will start out only affecting VAT, but the plan is to slowly roll it out to Income Tax, then Corporation Tax, and so on until the entire system is on the new digital platform.

But what does this mean for you, the taxpayer? The answer to that depends, at least for the moment, on how you currently manage your bookkeeping. For those of you lucky enough to already have your books managed by an AIMS Accountant, good news! All AIMS Accountants will be MTD compliant, so you don’t have to lift a finger. If you prefer to do your own bookkeeping, then you will need to make sure you’re properly registered and have up-to-date bookkeeping software that’s HMRC compliant. After that, you’re all set!

It’s refreshing to finally see Tax being moved onto a truly modern system, with the potential to make filing your taxes so much less of a hassle. If you have any questions about how MTD might affect you and your business, just get in contact with your local AIMS Accountant!