Making Tax Digital
In July 2017 HMRC announced that all businesses and individuals will eventually have to file their accounting information digitally, known as Making Tax Digital.
Making Tax Digital - What does this mean?
HMRC are changing how businesses need to keep their VAT records and submit VAT returns, and this is known as Making Tax Digital (MTD). From 1 April 2019, it has become mandatory for VAT registered businesses with turnover above the VAT threshold (currently £85,000) to keep their records digitally for VAT purposes and for the submission of VAT returns.
This changes the way HMRC want information from taxpayers and means that businesses will need to move away from existing desktop or manual recordkeeping to an online, compliant accounting software that meets with HMRC’s MTD requirements to submit their VAT returns, if not already done.
MTD will start to see most other businesses and taxpayers accessing their tax affairs online through digital records from 2020 onwards. You can make the switch sooner if you prefer to make sure you are prepared and fully ready, and see our guide on the advantages of going digital.
In addition to the obligations of MTD, by going digital, it will make managing your business finances easier and give you the confidence to ensure your records are more accurate and up to date.
Key facts - What you should know
If your turnover exceeds the VAT registration threshold after 1 April 2019, you will need to file your VAT returns through a MTD-compliant software. However, if your turnover then falls below the threshold you will still have to file your VAT returns through the software.
MTD will be available on a voluntary basis for the smallest businesses.
MTD is mandatory for VAT registered businesses with turnover over the current VAT threshold of £85,000.
You will need to make sure your software is fully MTD-compliant, and if not, switch to one that is in good time.
The good news is we are certified in the set-up and operation of such online accounting software specifically designed for small and medium sized businesses.
Going Digital - What cloud software is available?
Many providers are offering MTD-compatible software. You will need to decide and budget for your software, whichever package you go for. HMRC previously estimated MTD technology to cost around £280 per business.
We are Certified MTD Advisors and have partnered with QuickBooks and Xero and can support you to ensure you are fully compliant and ready so you can carry on running your business without interruption.
Please get in touch if you would like to discuss how MTD will affect you and how we can help you you go digital.
Read more about our packages and support.
Digital Accounting - What can we offer?
We can offer QuickBooks Online for £15+VAT per month for your bookkeeping.
We can also offer ReceiptBank for £20+VAT. This add on app can be used to scan any receipts and post to your online accounting package.
We offer the two together for £30+VAT to provide a comprehensive digital solution for your records.
Our QuickBooks packages include access to our seminars and online training sessions.
We are also a Xero partner and work with many other software packages, so let us know if you have another preference.
Need help using the software?
We run QuickBooks seminars to help you get started and take you through to becoming a QuickBooks expert! Just keep an eye out for our emails.
Can’t make it to a seminar or want further help, just get in touch with Sam or Matt who will be happy to book you onto one of our online training sessions to make sure you are confident on your new software.
What are the advantages of going digital?
Digital accounting software has significant advantages over the traditional ways of bookkeeping.
• See a clear picture of your current financial position, in real-time
• Have your bank feed your data directly into your accounts on a DAILY basis
• Take a photo on your phone of a purchase invoice and have it posted automatically
• See your profit, monies owed and your business bank balance 24/7 from your phone
• Create and send invoices easily on the go and make sure you are paid on time
• Track your sales and purchases, debtors and creditors, and manage your suppliers
• Estimate your tax and quarterly VAT payments so you are prepared
• Easy tax filing that matches HMRC requirements for MTD
• Plan for your tax bill by making tax part of your day to day recordkeeping
• Keep on top of your cashflow so you can budget effectively
• Create estimates, purchase orders and manage your stock
• Discard your paperwork to save space and help the environment!