Making Tax Digital
Are you confused by MTD? Follow our road map to see how it applies to you.
“At turpin barker armstrong, we are experts in market-leading accountancy and cloud-based digital solutions. We are excited to move our clients towards a digital way of accounting and tax reporting going forward, this will streamline processes for our clients and help us at turpin barker armstrong to work in a more environmentally sustainable way. We are following the guidelines from HMRC closely and will offer training and implementation services to help clients feel confident in the new ways of working”Dean Clark, Partner
Making Tax Digital what is it all about:
HMRC propose that by 2020 they will have moved to a fully digital tax system. With Making Tax Digital (MTD), HMRC aim to synchronise its internal systems and so create one online account for each taxpayer, for all their different taxes within HMRC. Via their 'digital account' taxpayers will be able to view all their payments, and offset overpayments in one tax against underpayments in others. This will have ramifications for all businesses and individuals in how they interact with the tax system, and the majority will need to use software or apps to keep business records and to update HMRC on a quarterly basis.
By April 2019 all above VAT threshold businesses will need to keep their records digitally for VAT purposes. Shortly after it is likely smaller businesses will also be required to keep digital records.
MTD changes the way HMRC need information from tax payers and means you may need to move from your existing desktop or manual record keeping onto an online accounting package. This is where we come in and can help get you started.
As a practice we have decided to use QuickBooks as our main Solution, we feel this is the best fit for our new and existing clients. We will be offering training to give a better understanding and an insight into the workings of QuickBooks as well as knowing your obligations and responsibilities under MTD.
In summary, Making Tax Digital will mean:
For the taxpayer:
The end of the tax return
The ability to pay tax based on your business activity during the year
The ability to upload or update your tax account in real time
All of your tax information in one place
For small businesses:
All of the tax information and interactions are in one place
No separate notifications of change of address or other details
Easy payment, time to pay and other options
Less direct contact with HMRC
For HMRC:
The end of the tax return
Smoother processing of data by removing peaks
Better interaction with taxpayers
“Customer Golden Record” – all of the information about a business in one place
The ability to target information and support much more directly
What are the advantages of going digital?
- See a clear picture of your current financial position in real time;
- Have your accounts 100% online so there is no software to install and everything is backed up automatically
- Have your bank feed your data directly into your accounts on a daily basis
- Take a photo on your phone of a purchase invoice and it then be posted automatically
- See your results, who owes you money, who you owe to and your business bank balance 24/7, 365 days a year from your phone.
What can I really do with digital accounting software like QuickBooks:
- Create and send invoices on the go
- Track sales, purchases, debtors and creditors
- Connect to your online banking
- View a snapshot of your business
- Estimate tax payments
- Easy tax filing that matches HMRC requirements
- Manage customers and suppliers
- Create estimates, purchase orders and manage your stock
We have also partnered with Receipt Bank who offer a paperless solution to accounting.
Read more about receipt bank here
