Type: Draft Legislation
Her Majesty’s Revenue & Customs (HMRC), the UK’s tax authority, is aiming to digitalize and modernize tax reporting and management. The first tax to go digital is the value-added tax, sometimes known as the “VAT tax” in the United States.
Businesses have had to meet increased standards in recent years regarding how transactions are documented, VAT returns are created, and VAT returns are filed. Making Tax Digital (or simply MTD) will be extended to all firms that are registered for VAT in the United Kingdom from April 1, 2022, regardless of their size, revenue, or location. As a result, beginning on this day, every firm with a U.K. VAT number, including U.S. businesses, must comply with the standards outlined below.
Effective date: 1 April 2022