Making Tax Digital (MTD) is a HMRC initiative to make the reporting of taxes for individuals and businesses easier and in a near real time regime uses electronic means. PAYE is already working under a real time regime since the introduction of RTI. HMRC now plan to expand real time reporting to other taxes.
From 1 April 2019, MTD will be brought in for all VAT registered businesses with taxable turnover more than £85,000. Of more interest to Credit Unions is the fact that Corporation tax will eventually fall under the MTD regime. It is expected that it will come into force for Corporation Tax from April 2020. All other non-corporate businesses with taxable income greater than £10,000 and less than £85,000 will eventually come under MTD but this is not expected until April 2020 at the earliest although they can volunteer to opt in.
We intend to provide further guidance on how MTD will impact Credit Unions nearer the time MTD for corporation tax is implemented. Further guidance on preparing for MTD is available at our main website www.alexandersloan.co.uk.