The UK tax authority HMRC announced that companies with a turnover under £85,000 (below the VAT threshold) could use their existing VAT accounts for November’s return. Before, it was stated that all companies would be obliged to register and prepare to use Making Tax Digital (MTD) before November 7. The extension of the deadline means that businesses can delay registering for MTD by one to three months, depending on their assigned VAT reporting frequency. The shift to Making Tax Digital has been taking place since last year, and the majority of businesses had already shifted to MTD in April when the HMRC began the second phase of the transformation after a one-year delay due to the pandemic. The UK’s tax authority claims that MTD should reduce the number of tax reporting mistakes. It is hoped that this way, it will increase the amount of tax collected. Some estimates show that MTD could help collect around £400 million in taxes annually. Please be reminded that companies are responsible for making sure their IT infrastructure supports the MTD software prior to the MTD onboarding deadline. Do you wish to learn more about Making Tax Digital? Reach out to our team!
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