What is Making Tax Digital?
Making Tax Digital (MTD) is an HMRC initiative designed to make sure the UK tax system is effective, efficient and easier for taxpayers.
Making Tax Digital for business (MTDfb) begins on 1 April 2019 with MTD for VAT. From that date, VAT-registered businesses above the threshold of £85k will have to keep digital records and submit VAT returns using compatible software. HMRC lists Xero as software that will be compatible with MTD for VAT.
Other components of Making Tax Digital, such as income tax and corporation tax, have been placed on hold until April 2020 at the earliest. Check this resource hub for updates on the latest developments, straight from HMRC.
Tax recording will be more accurate, providing fewer opportunities for errors, miscalculations and fraudulent activity.
The process will be faster and more automated for businesses, accountants and HMRC, helping them save valuable time.
With the right software, Making Tax Digital will make it easier for small businesses to record and file their tax returns online.
When does it all happen?
How do I prepare for MTD?
Accountants and bookkeepers
Get all you need to prepare your practice for Making Tax Digital today.Advisor resources
Find out how to make managing VAT quick and easy, starting now.Business resources
What’s Xero’s role in MTD?
Preparing for digital tax starts with managing business accounts online – it makes the transition smoother and business more efficient.
Xero is Britain’s leading online accounting software, and over 1 million subscribers around the world use Xero save time and get paid faster.
Having consulted with HMRC on Making Tax Digital, Xero is committed to supporting small businesses and their advisors through the transition.Learn more about Xero