Making Tax Digital Archives - WRLO Accountants

Almost half of sole traders unprepared for MTD changes

WRLO Accountants — Sat, 24 May 2025 12:14:35 +0000

Almost half of UK sole traders feel unprepared for upcoming Making Tax Digital (MTD) for Income Tax changes, according to research conducted by IRIS Software. The new MTD rules mandate digital record-keeping and quarterly Income Tax updates starting April 2026 and non-compliance can lead to significant penalties. The study found that almost one in three sole traders have never heard of MTD, MTD for Income Tax will require self-employed individuals, landlords and small businesses earning over £50,000 to keep digital financial records and submit quarterly updates using compatible software from April 2026. The threshold drops to £30,000 in 2027 and to £20,000 in 2028. The changes could place a significant burden on business owners, who will be required to submit at least five updates to HMRC each year. Mark Chambers, Managing Director at IRIS Accountancy, said: ‘These findings highlight an important moment of opportunity for the UK’s sole traders. With MTD just around the corner, there’s a real chance for businesses to modernise their financial processes, unlock efficiencies, and gain better visibility of their income and expenses. ‘It’s encouraging to see that nearly a quarter feel ready to meet the requirements, but that leaves a significant portion not experiencing the […]

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Financial benefit of MTD could be as high as £915 million

WRLO Accountants — Sat, 08 Mar 2025 16:44:52 +0000

The financial benefits of MTD for VAT could be as high as £915 million, according to analysis carried out by HMRC. Since April 2022 all VAT-registered businesses should be using MTD compatible software to keep digital records and submit returns. HMRC used responses from a survey with businesses in MTD for VAT using fully functional software to estimate the average time savings businesses have made. The results showed that, on average, businesses have saved time on their ‘business’ finances and record keeping’ compared to time spent before MTD. Across all VAT businesses using fully compatible software, the time saved is estimated to be between 26 hours and 40 hours per business per year. HMRC said that if this was extrapolated to the population, it estimated a time saving of between 32 million hours and 49 million hours in the 2022/23 tax year across all businesses in MTD for VAT. The financial value of this time is estimated to be between £603 million and £915 million. HMRC said: ‘The results of our analysis provide strong evidence that Making Tax Digital is having a positive impact for businesses. The findings complement other published estimates of the administrative burden of Making Tax Digital […]

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HMRC launches VAT Registration Estimator

WRLO Accountants — Sat, 03 Aug 2024 17:01:20 +0000

HMRC has launched a digital tool to help businesses estimate what registering for VAT may mean for them. The VAT Registration Estimator helps to show businesses when their turnover could require them to register for VAT and its effect on profits. A business must register for VAT if: Total VAT taxable turnover for the previous 12 months is more than £90,000. Turnover is expected to go over the £90,000 VAT threshold in the next 30 days. They are an overseas business not based in the UK and supply goods or services to the UK (or expect to in the next 30 days) – regardless of VAT taxable turnover. A VAT-registered business must charge VAT on eligible sales and can usually reclaim it on eligible purchases. Jonathan Athow, HMRC Director General for Customer Strategy and Tax Design, said: ‘We know that the majority of our customers want to get their tax right. We have listened to what businesses have said and the new tool is designed to help them understand VAT registration, including when they might be required to register.’ Internet link: GOV.UK

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