Getting Ahead With Making Tax Digital

By 02/11/2018 News & Advice
IMAGE - peole affected by Making Tax digital

On your marks… get set…

Making Tax Digital is an exciting new initiative which is changing the way that business and tax information needs to be provided to HMRC.

It’s the biggest overhaul to the tax payment system since self-assessment, offering huge opportunities to business owners.

It’s due to go live next April… are you ready?

What is Making Tax Digital?

The new rules require every business with a turnover greater than the VAT threshold (currently £85,000 pa) to keep VAT records digitally. Plus, their VAT returns will have to be filed using software or spreadsheets that comply with Making Tax Digital (MTD) requirements. (At Re:Accounts, we recommend Xero accounting software.)

There are few exceptions – mostly involving trusts, ‘not for ‘profit’ and public sector organisations. Does MTD affect you next April? Have a no-obligation chat with us – we’ll give you a definite answer.. you need a ‘yes’ or ‘no’ without any ‘maybes’!

Whilst VAT is the first tax to move to Making Tax Digital, all other taxes – such as income tax and corporation tax – will eventually be included for businesses and individuals with an annual turnover of at least £10,000.

An amazing opportunity

MTD offers a wonderful opportunity for business owners. It means that you can manage your business more proactively, with big advantages such as:

  • Greater understanding of current business performance, closely monitoring your business goals (and Key Performance Indicators). This allows you to adjust, optimise and invest as needed – why wait for a retrospective review at your year-end when you can make a difference now?
  • Clear review your business direction, understanding where you are heading and where you want to be, taking the appropriate action.
  • Working smarter with time-saving software and increased opportunities for joint reviews of real-time figures – within your team and with your accountant.
  • Less investigations – reporting your underlying transactions to HMRC means if your figures change in a quarter HMRC can see why and are less likely to investigate

What’s not to like?

The team at Re:Accounts gives a human side to MTD, (we love a coffee and a chat!). With no HMRC jargon or stuffy accountancy speak, we can reassure you about MTD. We know exactly what systems, information and reporting are needed. Our clients have been ready for months. MTD is an opportunity to be seized – not a necessary evil to be implemented at the last minute. Go for it!

“Online accounting makes record keeping and financial planning and forecasting much easier,” says Emily Prior, Chartered Accountant and Xero champion at Re:Accounts. “Your current accounting reports are available at the touch of a button – any time and from anywhere. Plus, it’s easy for us to review live data with our clients. Once people get used to the change, it will save them precious time and offer valuable insights. All our clients are ready for Making Tax Digital and are already seeing the benefits.”

When does Making Tax Digital start?

These changes come into force on 1 April 2019. Not long to go!

Is your business VAT registered?

Research shows that 25% of businesses affected by MTD next April are still using paper-based systems. Is this you? Don’t worry!  There’s still time to make sure that you’re ready and relaxed about MTD.

If you have any concerns or queries, contact Re:Accounts for a no-obligation chat about Making Tax Digital. We promise it’ll be a jargon-free zone!

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