What is Making Tax digital and how does it affect me? - WHY DO I NEED A MAKING TAX DIGITAL (MTD) cloud ACCOUNTANT?
As MTD accountants in Baildon, West Yorkshire we specialise in support and training for the upcoming transition from spreadsheet accounting to the accounting software era. Making Tax Digital (MTD) has been introduced by HMRC to help individuals and businesses to get their tax right. It is important that accounting software and processes are implemented correctly right from the start to avoid the costly headache of correcting things later. That's where we come in.
When Will mtd Affect You?
APRIL 2024 is D-Day when MTD for Income Tax (MTD ITSA) is set to begin. It will apply to all unincorporated business and landlords for Self Assessment with annual business and/or rental income over £10,000.
The £10,000 threshold refers to your gross income from all businesses and/or rental properties. You will still be eligible for MTD ITSA even if none of your individual sources of gross income generates you £10,000 or more in any given year.
What Will You Need To Do?
Under MTD ITSA you will be required to: -
- Keep digital records and use compatible software to submit quarterly information to HMRC
- Report your financial data to HMRC at least every quarter
- Finalise your taxes at the end of your accounting period and submit a final declaration
Without effective and HMRC approved accounting software and the technical skills to process transactions efficiently this will be an onerous task. In order to prepare you need to ensure that you have the correct staff in place to deal with this or contact a qualified professional to help with the transition. As we've already advised, without an MTD accountant things can go drastically wrong.
How Can You Become Compliant?
To comply with Making Tax Digital, you have to keep digital records. This must be done using what HMRC calls 'compatible software’. In other words, it must be able to connect directly to HMRC and send your details to them digital links.
Deciding which ‘compatible software’ to use and learning how to use it and how to make any sense out of the data is the major challenge and can be traumatising. There are so many resources available on the internet but how do you find the time to make sense of it when trying to keep your business going? That’s where we come in.
Don’t Panic, we can help every step of the way.
We can help you to choose the right software for your business, set it up and quickly get you up and running without taking lots of time away from the important focus of running your company.
We can train you and/or your staff and ensure that all of your information is available well in time for HMRC deadlines so that you don’t get hit by penalties.
I DON’T WANT TO DO IT!
The good news is that you don’t have to get involved any more than you want to.
We can take the whole process away and provide you with monthly reports showing you whether you have made a profit or a loss and how much VAT/tax you owe.
We can prepare the quarterly submissions for HMRC ensuring that you don’t receive any nasty penalty surprises.
We can help you to make sense of the data to change things if you’re not doing as well as you would like.