You may have come across HMRC’s Making Tax Digital (MTD) initiative a while ago – businesses making over £85,000 a year have been required to follow specific rules to file their VAT returns for some time now.
For everyone else, the rules have been voluntary.
But the government is now looking to further roll out the scheme.
From April 2022, VAT-registered businesses with a turnover of less than £85,000 will be required to follow MTD rules for VAT returns.
And from 6 April 2023, self-employed workers, landlords and even hobbyists who make over £10,000 a year in non-PAYE income will be required to follow the rules when they file their tax returns.
If your only income is through PAYE, you won’t be affected.
Quite clearly it’s still a long way away for most people but it’s worth taking a moment to look into the guidance around MTD and how you might be affected.
And if you are affected, check whether you need new software to implement the rules, how much they cost and start building it into your budget.