Yesterday, Chancellor Jeremy Hunt presented his second Autumn Statement, but with a very different tone to the gloomy announcements made this time last year. The Chancellor announced initiatives with a massive focus on pushing growth in the economy. The main question you’ll all no doubt have is… “how does it affect me?”, let’s take a look…
What next for Making Tax Digital?
3 August 2020
Gavin Hooker
Cloud Accounting, Accounting & Compliance
Last week the Government published an overview of their Making Tax Digital project. The big news is that all VAT registered businesses with VAT turnover below £85,000 will be required to follow MTD rules for returns filed on or after April 2022!
That might sound a long way off, but we strongly recommend you start taking action now so that you are well prepared for the changes.
If you are using excel spreadsheets or manual books then you will need to move to a digital solution such as Xero, Quickbooks or Sage. As a firm we do not support other software packages (there are literally hundreds on the market and far too many for us to train to use). We are however encouraging clients to use Xero accounts software (we will continue to support Quickbooks and Sage). Xero is the fastest growing cloud software in the UK and is quickly establishing itself as the leading player in the UK with over 536,000 users (as at 30/09/2019).
Our cloud champion, Gavin Hooker, is an expert on Xero and has helped hundreds of businesses successfully move to Xero software and to become MTD compliant.
Please talk to us – we can help you go digital now and you will be amazed at the simplicity of Cloud software and how it will improve your business!
Making Tax Digital for VAT
VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are already required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns.
If you are below the VAT threshold you can voluntarily join the Making Tax Digital service now.
VAT-registered businesses with a taxable turnover below £85,000 will be required to follow Making Tax Digital rules for their first return starting on or after April 2022.
If you are already using Xero or Quickbooks software and are VAT registered but with turnover below £85K then why not make yourself MTD compliant now? It is easy to do and Gavin can help you.
Making Tax Digital for Income Tax
Self-employed businesses and landlords with business turnover above £10,000 will need to follow the rules for MTD for Income Tax from their next accounting period starting on or after 6 April 2023.
Some businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot to test and develop the Making Tax Digital service for Income Tax.
If you are a self-employed business or landlord you can voluntarily use software to keep business records digitally and send Income Tax updates to HMRC instead of filing a Self-Assessment tax return.
If you need any further information on Making Tax Digital or how the cloud can help your business, please contact Darren call him or on 01634 731390.
The content in this blog is correct as at 03/08/2020. See terms and conditions.
