What is MTD?
Making Tax Digital is the UK Governments plan to make it easier for individuals and businesses to ensure their tax is correct and submitted on time. Subsequently, there are some fundamental changes to the way the tax system works in the UK meaning we can no longer file our VAT returns manually.
When does this come into effect?
VAT registered businesses with a taxable turnover above the VAT threshold will be required to use the governments new MTD service to not only keep digital records of their VAT but also to submit their VAT returns electronically from 1st April 2019. (The exception to this is a small minority of businesses that have special requirements).
So, what do I need?
Most businesses have digital accounting software such as Sage or XERO, however in many cases, it will require an update in order to be able to submit VAT using the new system. This is a must have for all businesses that are required to be MTD compatible, and you must ensure your digital software is compliant with the MTD system. For many this will mean an upgrade of the software version so that it contains a suitable submission module, however for others it may be a first foray into digital accounting and may require something more.
MTD is not just about upgrading your software and being compliant, it is also an opportunity for you to review and evaluate Cloud Accounting overall; take a step back and evaluate where it can potentially improve and enhance your business and create efficiencies that you don’t have now.
Taking this opportunity means you can move forward with a holistic approach to your IT and business systems. In some cases, we have seen companies that have been paying for accounting software they don’t need so we were able to help them change to a package that was a much better fit for their business, at the same time as providing the much-required upgrade to be MTD compatible.
Another distinct advantage of a Cloud Accounting solution is the ability to share accounting data with your trusted advisor and increasing productivity across your teams and efficiency.
The benefits to cloud accounting are clear, the necessity for MTD compliant software is here.
Asking the right questions:
MTD is a component of Cloud Accounting and you should be thinking about MTD now if you haven’t done so already. The amount of working days left until MTD comes into force is rapidly decreasing and so you should speak to your bookkeeper or accountant ASAP to ask the following questions.
- What software version do I have?
- What does my current software license provide for me?
- Am I on the correct package for my business?
- Am I paying too much for my software?
- Is there a better solution for me and my business?
- Is a FULL Cloud Accounting solution best for me?
- Where are my backups? (as with MTD I am required to keep records).
You can speak to either Dave Jackson or Matthew Jones in our IT team at Hallidays if you would like to know more about MTD and what Hallidays can do to help. We can also offer a FREE IT Audit* service to see if we can combine an upgrade of your software with making sure that your IT systems are suitable for the years ahead. Call us NOW on 0161 476 8276. If you’d like further information on Making Tax Digital, take a look at our other blogs for insights.
*Conditions apply, speak to a member of the IT Team for more information.