Cloud Accounting Rotherham and Sheffield

Making Tax Digital

Two years ago, it was proposed that Her Majesty’s Revenue and Customs (HMRC) was to move to a fully digital based tax system.

What's going on?

By the end of the 2020/21 tax year the way that businesses, including landlords, currently interact and liaise with HMRC will change beyond all recognition. This initiative is known as “Making Tax Digital” (or MTD).

Under current proposals the introduction of MTD will be phased in, as follows:

Making Tax Digital Icon

2018/19

The first phase affects entities who are VAT registered with an income over £85,000. From April 2019, they will need to keep a digital record of all VAT transactions. Entities will also be expected to submit VAT returns using MTD compliant software.

2019-20 Making Tax Digital Icon

2019/20

The second phase affects all entities between £10,000 and £85,000 will follow suit. For those not yet on a cloud accounting solution it is a transition that they will need to consider.

2020-21 Making Tax Digital Icon

2020/21

The first phase affects entities who are VAT registered with an income over £85,000. From April 2019, they will need to keep a digital record of all VAT transactions. Entities will also be expected to submit VAT returns using MTD compliant software.

What does it mean for me and my business?

As mentioned above, all businesses will be required to become compliant with MTD, but not at the
same time. You will be required to move into the MTD regime (on-board) from the start of your accounting period commencing in one of tax year listed above. The timing of your migration will be determined by the nature of your business i.e. self-employed, limited company and the level of your turnover (as set out above).

For example:
If you are self-employed with turnover below £85,000, but above £10,000 and your accounting period end is 30 June. You will not be required to on-board until 1 July 2019 and to file your first quarterly update until after 30 September 2019.

How does MTD benefit me and my business?

There are four main benefits of MTD to small businesses:

  • Improved quality of record keeping
  • Reduced likelihood of error (due to less manual entry)
  • More efficient management of business affairs
  • Less time gathering and inputting data

Will Quickbooks develop or enhance their existing product that keeps me compliant with MTD?

Yes. We’ve been consulting with the HMRC to provide you with an online experience that makes it as easy as possible to comply with the new MTD initiatives. We’ll be able to share more information with you in the coming months.

Call us today to discuss how we can help get your business ready for the new era of digital tax and how you can get QuickBooks HALF PRICE FOR LIFE!* (T’s & C’s apply).

You can then start benefiting from our partnership with QuickBooks. Not only will we provide you with MTD for VAT compliant accountants package, there are significant benefits to your business if you use the recommended package.

*Half price applies whilst we are engaged to do your VAT return and/or Bookkeeping, otherwise a discount of up to 40% will apply.

What can I do now?

  • Get in contact with our team of experts who will be able to talk through what MTD means for your specific business
  • Understand the new digital tools and how the quarterly submission of tax based information will work in April 2018

What can Brearley & Co do to help?

Over the next 12 months, we want the migration to MTD to be as efficient as possible.

Speak to our team today on 01709 581667 or email admin@brearleyandco.co.uk

How can we help you?

Brearley & Co Accountants are pleased to offer a free, no obligation, initial consultation with one of our experts who will be happy to discuss your business needs and how we can help you.

Are you a new business? Or an existing business interested in our services?