You’ve probably heard all about the Government’s Making Tax Digital initiative and how it will be implemented from April. If you haven’t, Making Tax Digital is part of the government’s plans to make it easier for businesses to get their tax right first time. Latest figures have revealed that avoidable mistakes in businesses filing their tax is costing the Exchequer over £9 billion a year!
Making Tax Digital is making fundamental changes to the way our tax system works and HMRC are aiming to become one of the most digitally advanced tax administrators in the world!
From April, it’s only the way that VAT registered businesses submit their VAT records that is changing, however, HMRC will eventually roll this out to businesses including Sole Traders and non-VAT registered businesses.
Lots of business owners, in particular small business owners have been concerned about the changes. We sat down with The Business Centre resident, Helen Adams from HRA Accounting and caught up with her over a coffee in Mel’s about what these new changes mean and how best to prepare for them!
Helen’s Advice for Preparing for Making Tax Digital
Preparing for Making Tax Digital is nothing to be scared of or worry about, it just has to be done. Many of Helen’s clients weren’t using software and were still using spreadsheets and uploading their tax records to HMRC manually. Over the past few months she’s been advising her clients on the variety of user-friendly software that exists, with solutions for every business at affordable prices.
Here’s her top 5 tips for getting your business ready for MTD:
- If you don’t have an accountant already, then it’s important to seek some advice and find out the best MTD compatible software for your business. There are lots of popular MTD compatible software options such as Xero, Quick Books, Sage and Freeagent.
- If you’re a VAT registered business, then all of your accounting records need to be recorded digitally. It’s important to be ready, as all VAT quarters after 1 April will have to be submitted by MTD compatible software.
- Register with HMRC for Making Tax Digital submissions online to ensure that you’re ready to file your taxes online.
- Look at this as an opportunity to review your systems and the software your business uses. Tackle it like a mini audit to make sure that everything you’re doing is working for your business. Plus, it will be a good opportunity to possibly cut down on the amount of paper records that your business is keeping and storing by digitalising your paperwork. Some of the software platforms such as Xero can scan receipts straight from your phone into the platform!
- Don’t panic. There is plenty of help out there but it’s time to think about getting MTD ready if you’re not already!
If you don’t already have an accountant, it could be worth getting advice from one, to find out more about what the best software is for your business. In addition, they can help set up and implement the MTD procedures for your business. Even if you want to do it all alone, accountants can train you on the software and help you get set up, so you know that you’re going in the right direction. Helen and HRA have been busy training their clients and helping them implement MTD changes for the last few months!
If you’re worried about being prepared for the MTD deadline, why not see if HRA can help? HRA (Accounting) Ltd provides a range of services from bookkeeping to accounts service for many SME’s over a wide range of industries. With over 30 years of experience, HRA can provide support in any area of your business; from raising invoices to paying bills, from running payroll to preparing cash flow, HRA can be as involved as you need to help you run your business. Please ring Helen on 01446 731160 or 07801 998785, or you can email on [email protected]