Making Tax Digital – Digital VAT Filing
Now that the Tax Return deadline has passed its time to focus on the next challenge!
There has been lots of media coverage in the accountancy world about Making Tax Digital. We know all about it here at Haines Watts and have been preparing our clients for the switch to digital VAT filing for sometime. We do appreciate however that it’s not been on every ones agenda as much as it has ours!
The basic fact is that if you are VAT registered and your turnover is over the VAT threshold, currently £85,000, you will have to change the way you keep your records and file your VAT.
For some these changes will be minimal, for others they require a change in processes and the way in which you record and store your financial data.
If you already use bookkeeping software such as Quickbooks or Xero then you probably won’t need to change much. Other programs such as Sage may require you to update to the latest version in order to be compatible with the new HMRC MTD filing system.
So what do you need to do?
Are you VAT registered? Is your turnover above the threshold?
If you answer yes to both the above then you have to ensure you can file digitally for your first VAT period starting in or after April 2019.
For example: If your VAT periods are January, April, July & October, your first MTD filing period will be July. This is because MTD applies for the first period that starts after April 2019.
If you are VAT registered but not over the threshold you are not required to file under MTD regulations until 2020. However, it’s better to give yourself time to learn how to use digital bookkeeping software so why not aim to go digital in your new financial year.
If you are not already using a software package for bookkeeping then our advice would be to embrace the digital age! Once you’ve seen just how easy it is you’ll wonder why it took you so long!
First step, contact us. We are familiar with all the software packages available and after an assessment of your requirements we can recommend which package is best for you.
If you are already using a digital package for bookkeeping then check with the provider that you are MTD compliant.
If you are happy with our recommendation for digital bookkeeping then the next step is to look at your current records, your accounting period and your bookkeeping requirements going forward.
It’s always better to start using a new software package at the beginning of your financial year, but sometimes this isn’t always possible.
We can help assess your current systems, whether they are cashbooks, spreadsheets or something else, and work out the easiest and least painful way to get you started with digital bookkeeping.
Once your data is in we will show you what you need to do to complete the basic functions. All the software packages are easy to use and we know that within a few months you will see the benefits of using digital software.
If you would like further, more in-depth, training we will be happy to organise this for you. Our staff are Xero and Quickbooks certified and can help you until you are confident.
This is the best step! A few months into using your digital bookkeeping software you will be wondering why you didn’t do it sooner! Depending on which package you choose you will be able to look at your financial data on the move.
You can raise invoices, review bank transactions and add receipts to your accounts. And with a wide range of add-ons available you can take payments on the move, track business mileage and never worry about losing a receipt again with receipt bank!
Using software packages like Xero or Quickbooks allows you to grant access to your accountant. This means we can help you if you have a tricky transaction and we will have access to the information needed for your end of year accounts.
Benefits of Cloud Accounting
Making Tax Digital doesn’t need to be taxing! We know it will benefit business owners in keeping their data in an accessible, secure place. Keeping real time information will help you see and understand how your business is performing. You won’t need to worry about back-ups or data security, its all managed for you within the software.
So while the move to digital may look frightening it really isn’t. Our digital on-boarding team have been working with businesses for a long time now ensuring they will be MTD compliant. We also have a keen eye on the add-ons available on the market. Some of these are so simple but will make such a huge difference to the amount of time you have to spend on accounts admin.
Do you want to get prepared for MTD? Give Haines Watts a call. We will set up a fact-finding meeting to assess what you need and the best way forward for you and your business.
If you would like to view a copy of our Making Tax Digital factsheet click here.
To find out more about some of the cloud accounting packages we offer visit our website here.
Call us now on 01603 700885 or 01379 640555 for so we can discuss what you need to do and when.
Want to know more? Call us on 01379 640555 or email firstname.lastname@example.org