Making Tax Digital for VAT

Making Tax Digital

 

Making Tax Digital (MTD) is the government’s initiative to digitise the UK tax system. It aims to reduce the tax gap between what is owed to the Treasury and what is actually paid by getting all taxpayers to calculate and pay the correct amount of tax.

 

MTD for VAT was the first stage in the tax digitisation process, and since 2022, it has been mandatory for all VAT registered businesses to comply with this regulation.

 

Looking ahead, MTD for Income Tax (MTD for IT) will be rolled out in three separate phases to the self-employed and landlords:

 

  • Phase 1 from April 2026 targets those with an annual income over £50,000.

  • Phase 2 from April 2027 targets those with an annual income over £30.000.

  • Phase 3 will bring anyone with an annual income of £20,000 or more into the scheme, and while no implementation date has been set, the government has stated it will be sometime during the current parliament.

 

Following MTD for Income Tax, MTD will also be applied to partnerships and corporation tax, although their implementation dates have not been confirmed yet.

 

 

 

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Software to comply with MTD

 

MTD for VAT

 

Absolute developed the Excel VAT Filer to help accountants and small businesses comply with MTD for VAT. This revolutionary bridging software lets users digitally file their VAT returns directly to HMRC’s MTD for VAT portal without using accounting software.

 

The Excel VAT Filer was deliberately created to provide an easy, low-cost solution for complying with MTD for VAT. It costs just £40 + VAT for an annual single-user licence for up to 10 different trades. The software has been hugely popular, and to date, in excess of one million VAT returns have been filed using it.

 

Further details of our Excel VAT Filer bridging software can be found here: www.absoluteexcelvatfiler.co.uk.

 

 

MTD for Income Tax

 

Following the tremendous success of the Excel VAT Filer, Absolute is developing the MTD for Income Tax Filer. This will also use bridging software technology and will be instrumental in helping the self-employed and landlords comply with the MTD for IT rules when they come into force.

 

To find out more about MTD for Income Tax please go to: www.absoluteexcelvatfiler.co.uk/pages/mtd-for-income-tax.

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