Making Tax Digital – Coming Soon!
20 March 2017 12:07
You may have heard recently that the Government are having a major overhaul to the tax system, a move called “Making Tax Digital”. MTD is, without doubt, the biggest change to the tax system for many years – and it will affect every individual tax payer and business.
MTD is coming, and we feel it is a positive step. It is therefore time to start planning so you can embrace the change, rather than be caught off guard when it will affect you!
So, what is it all about?
The aim of the government is to have more up to date and more accurate figures from individuals and businesses alike. The key requirements are:
Businesses must keep digital accounting records – the days of manual cash books are coming to an end.
Businesses must update HMRC with the income and expenses, every three months, with compliant software.
Once a year, the accounts must be finalised by adding year end adjustments, etc – this is similar to what happens now, but the filing deadline will be different for different year ends.
When will it come into effect?
MTD is being phased in from April 2018, with companies finally joining MTD in April 2020. Although there have been calls to delay the implementation of MTD (and indeed, a 12 months delay was announced in the Spring Budget), one thing is certain, MTD is coming!
Although MTD may not impact you for a couple of years, we are encouraging businesses to “get ahead of the game”. Let’s start getting ready for it now, so when the system is fully in place, you are ready.
Cloud Accounting – what is it?
One way to get ready for MTD is to start using a cloud based accounts package. Not only will this ensure you are getting ready for MTD, it will also bring other benefits to your business. These benefits include:
Having real time information on your business.
Access to your accounting records from anywhere with an internet connection.
Having an up to date idea of liabilities, including VAT.
Your accountant has all information at their finger- tips.
With live bank feeds, your bank is reconciled as often as you like.
With more information at your disposal, you can make better informed decisions on your business.
Simplicity (once trained!)
Here at MoynanSmith, we are qualified advisers and use many software providers including QuickBooks, Xero, Sage, Kashflow, etc. We are therefore well positioned to help you choose which software is right for you.
With full packages starting from £10 per month, these offer excellent value for money, and the benefits to your business far outweigh the additional cost.
MTD is coming, so start now to get used to how the system will affect you.
We are here to help. Why not get in touch and we can discuss your options in more detail.
We will be discussing all our client’s options with them over the coming months, but if in the meantime you have any queries, do not hesitate to contact us.