It is now six months until Making Tax Digital (MTD) kicks in. So here at Robson Laidler Accountants we are ready to guide you.
WHAT IS MTD?
MTD is a government initiative to bring the tax system online. It means linking business accounts through to HMRC’s systems in an automatic online process, to reduce errors and improve clarity. It is starting with VAT but will soon include income tax and corporation tax. Eventually all taxes should be brought together in a much clearer and user-friendly way.
HOW WILL IT AFFECT YOU?
A key plank of the system is that all businesses included in MTD must keep their accounts on an electronic accounting system that can talk to HMRC’s online systems.
Because there must be a direct link from your systems to HMRC’s, it might affect how we as your agent can help you. HMRC are trying to make sure that we can help as much as possible but there is a combination of new requirements and increased flexibility that may mean that we have a mixture of constraints and opportunities.
Because every business is different, MTD may affect you in unexpected ways. HMRC and other bodies are shortly going to be talking a lot about it, but they can only talk in generalities. Do make sure that you understand the impact on you specifically.
KEY DATES FOR YOUR DIARY
1 April 2019 – you need to be operating MTD for your first VAT period starting after this date (if you have a turnover of over £85K and are VAT registered).
July – September 2019 – For people who do VAT quarterly, you will need to do your first MTD VAT return around now.
April 2020 – You may need to start operating MTD for income tax/corporation tax too. Naturally we’ll keep you informed.
WHAT YOU NEED TO DO NOW
If you use accounting software, check whether it supports MTD.
If it does, check that you know how to use it. Talk to your software supplier and to us to make sure that you have it all correct.
If it doesn’t, find out when it’s going to and again, talk to your software supplier or to us.
If you find your software is not going to support MTD, you will need to find some that does.
Talk to us to make sure you get the right system for your business.
If you don’t use accounting software, you’ll need to find some and start using it – once again, talk to us!
WHAT HAVE WE BEEN DOING TO PREPARE?
We have been following the development of MTD for several years now and, through the UK200Group of which we are members, we have been in discussions with HMRC to ensure we are on top of requirements.
We are also in touch with all of the leading accounting software suppliers so we can make sure you have the right kit to meet your needs. We have thought about how we can best help all our clients and we are ready to go.
HOW CAN WE HELP?
Although from HMRC’s side it’s pretty much a one size fits all, we can help you tailor things to fit you. We can help you choose, install and operate accounting systems, and we can get involved with the process to a greater or lesser extent depending on what suits you.
WE’RE READY TO GO!
The arrival of MTD will be a big shake-up for many businesses. But it’s also an opportunity to tidy things up and get a fresh start. Done right, it could very well make your life easier.
We are here to help, so please talk to us about how to make accounting simpler, more automated, and less of a headache.