In this second blog of a two-part series we look at the practicalities of making digital submissions and recommend software that could make your life easier.
There are hundreds of software packages on the market. Our team at Friend and Grant have tried quite a few and based on our findings we have taken the decision to encourage our clients to use Xero, although we also support QuickBooks and SageOne.
Although the use of bridging software to upload spreadsheets for MTD is available, as mentioned earlier, we are encouraging our clients to use cloud software. Submissions through bridging software alone do not fulfil all MTD requirements, there will also be additional time required to get a spreadsheet into a format that is compatible with the bridging software. Bridging software does not offer business owners all the tools they may require running their business. Xero on the other hand offers packages to suit all business owners and is fully MTD compatible.
Xero is one of the fastest growing cloud accounting software’s and here at Friend and Grant we find it the most user friendly. We are a Xero Platinum ProAdvisor and within the firm we have many experts using the software day in day out, providing clients with top quality training and support.
If you subscribe to Xero through Friend and Grant, and dependent upon your circumstances, we have access to licences that start from £5 + VAT per month. Please note that if you have a rental property business and a self employment, each business will require a separate Xero licence.
How can I prepare for MTD and going onto a software?
The best way to prepare for going onto a software is to, open a separate bank account for all business transactions if you’re not already using one. You will need to open a separate bank account for each of your businesses. The accounts do not need to be business bank accounts; a current account will suffice.
Separate bank accounts will help simplify your quarterly data input and submissions. It is possible to use the software with your personal account, but this will make the data inputting more time consuming.
Once you’ve opened a separate account, you should move any business direct debits to the new account, pay any expenses out of the account and ensure that your sales/property income is paid into the account.
When you’ve made above changes, you’re ready to start using Xero. As a client of Friend and Grant, one of the team will help to get your Xero account set up and link your bank account to the software. Then you’re good to go!
You can also download the Xero app to your phone so you can do your accounting on the go!
We offer training packages starting from £100 + VAT. These include a call with a member of the team to discuss your needs, followed by a training session either face to face or via Zoom. Your support doesn’t end there, our team are always at the other end of the phone.
What happens next?
HMRC’s guidance states that the following will happen by 6 April 2024:
- Individuals will submit their Self Assessment Tax Returns for 2022/23 by 31 January 2024.
- HMRC will then review the Returns and check if qualifying income is more than £10,000.
- If it is, HMRC will write to you to confirm that by 6 April 2024 you must meet the requirements for Making Tax Digital for Income Tax.
- Individuals or their agent must find software that’s compatible with MTD and authorise it.
- Individuals or their agent must sign up for Making Tax Digital for Income Tax.
If you want to help HMRC test and develop Making Tax Digital for Income Tax before 6 April 2024 arrives, you may be able to voluntarily sign up through your software provider. Xero is already available for use with MTD.
Please feel free to give us a call – we can help get you to get started now and to be well prepared for when the new rules come into place.
If you have any further questions on MTD, Xero or how we can help your business, please contact your account manager, or if you are a potential new client please call us today on 01634 731390.
The content in this blog is correct as at 17 October 2022 See terms and conditions.