Wave’s definitive guide to Making Tax Digital software
What is a Making Tax Digital?
Making Tax Digital, commonly abbreviated to MTD, is a government initiative that aims to simplify accounting through the digitalisation of the tax return process. By legislating the digitisation of the tax, those affected will be able to ensure they are submitting accurate and complete tax data. As a result, businesses and individuals alike will be able to save time spent on submitting tax returns by ensuring they get it right the first time round.
Who is affected?
- Self-employed businesses/individuals and landlords with a gross annual income above £10,000
- VAT-registered businesses with a taxable turnover above the VAT threshold of £85,000
- VAT-registered businesses with a taxable turnover below the VAT threshold of £85,000
Making Tax Digital for Corporation Tax
Those within the margins of corporation tax are not affected by the new government initiative. However, plans are in place to make tax digital for Corporation Tax (the government will not implement any legislation before 2026). The government plans to introduce a pilot for Making Tax Digital for Corporation Tax and encourages businesses within the Corporation Tax margin to get involved in providing feedback to help improve the scheme.
When will Making Tax Digital be a legal obligation for qualifying businesses and individuals?
Self-employed businesses and landlords with an annual income above £10,000 and VAT-registered businesses with a taxable turnover above £85,000 will be required to be MTD compliant by the 6th of April 2024.
VAT-registered businesses with a taxable turnover below £85,000 will be required to be MTD compliant by April 2022.
Some organisations and individuals who qualify to comply with Making Tax Digital regulations are taking place in a government pilot to test and develop the Making Tax Digital initiative for Income Tax. These entities are already recording tax data and submitting updates to the HMRC and are able to offer feedback to improve the service.
How do I comply with Making Tax Digital
If you are looking to prepare for the changes that Making Tax Digital will bring, look no further than our Making Tax Digital solutions.
Created and developed by Professional Advantage, PAMTD supports SunSystems 4.4, 6.1 and beyond. PAMTD transfers all data from SunSystems into the MTD VAT format, allows for storage of non-VAT related information that is required for reporting on the Electronic Tax Return and ensures compliance within the security of SunSystems and HMRC regulations.
NetSuite also offer an add-on MTD software that seamlessly integrates with the core product. NetSuite’s Making Tax Digital compatible platform simplifies VAT and Income Tax return for UK eligible businesses and individuals. For existing NetSuite users, the MTD functionality is available immediately for free with low implementation fees.
What are the benefits of Wave’s Making Tax Digital software?
- The process is automatic, efficient and effective
- Reduces the preparation & report generation by 3 to 6 hours per quarter
- Significantly less room for errors in submission
- Reduces costs and time spent on errors for your business
- Compliant with HMRC regulations
- On-demand inquiry, validation & submission
- Caters for multiple Business Units. databases and groups
If you are interested or would like to learn more about Wave’s Making Tax Digital solutions, please contact us today and speak to one of our experts.