Ftax is fully MTD compliant
MTD is a new way of submitting tax to HMRC which, combined with a set of principles, has been designed to reduce errors and improve tax filing timeliness. This will involve the increased use of software to automatically process accounting and tax filing data from its time of capture, e.g. data entry from an invoice, to the point of submission.
The first MTD tax filing system to be introduced by HMRC was VAT. Self Assessment will be next, possibly followed by Company tax, although this is yet to be confirmed.
The Ftax VAT tax filing form is already fully compliant with MTD. Ablegatio is fully committed to follow future HMRC MTD initiatives, and to upgrade the Ftax service accordingly.
All UK VAT businesses need to comply with MTD rules from April 2022. This includes limited companies, partnerships, sole traders, UK landlords, charities, and trusts.
Making Tax Digital (MTD) for VAT is part of an HMRC move to simplify tax, making it easier for taxpayers to file their tax correctly. Businesses who fall within the defined thresholds will need to use MTD compliant software to keep digital records and to submit their tax returns.
MTD for VAT was first introduced in 2019 for businesses over the VAT threshold (£85,000). From April 2022, the rules are being extended to all VAT registered businesses, regardless of turnover.
HMRC research shows existing participants have felt more confident about filing their returns since the MTD VAT rules were introduced. Most of those surveyed found it easier to prepare and calculate their VAT return.
MTD benefits include:
Along with saving time, the main benefit of MTD is the improvement in accuracy. Processes which were previously carried out manually are automated using MTD software. This leads to income and expense values being imported correctly and errors being automatically identified. This means businesses can spend less time on paperwork and more time on their business.
From April 2024, MTD will be rolled out for Income Tax Self Assessment. Businesses and landlords with an annual turnover above £10,000 will need to register from April 2024. MTD for Corporation Tax will not be introduced before April 2026.
Ftax will follow all MTD initiatives, beginning with the introduction of MTD for Self Assessment in April 2024.
There are a few exceptions, but those who do not comply with the rules and meet MTD deadlines could face a fine. From January 2023, HMRC is moving to a points-based system so that MTD for VAT penalties will only be given to those who regularly make mistakes and miss deadlines. Taxpayers who make occasional errors will not be penalised.
The Making Tax Digital rules require you to:
Only software recognised by HMRC which meets the Making Tax Digital requirements may be used for MTD tax filing. The Ftax MTD VAT form fully complies with HMRC’s MTD requirements.