Making Tax Digital (MTD): Important news for all VAT-registered Businesses!

Making Tax Digital is the HMRC initiative that aims to make businesses tax affairs more effective, more efficient and more accurate. All VAT-registered businesses will need to make arrangements to begin keeping digital records, and submitting VAT returns through MTD compatible software from 01/04/2019.

The changes mean that all businesses* will be required to use software that is capable of keeping and maintaining records, preparing VAT returns from those digital records and submitting the returns to HMRC digitally using their API platform.

*Some businesses with more complex VAT requirements such as ‘not-for-profit’ organisations that are not companies, businesses that are part of a VAT group and local authorities will not be required to make these changes until October 2019. A full list of the types of businesses included in the delayed introduction can be found on the Gov.uk website.

Cloud Software:

There have been huge leaps forward in accounting software in recent years, and many providers have made significant improvements to their systems in order to comply with the new MTD legislation. While this is all good news for you and your business, it can become overwhelming trying to decide which software is the best fit for your business. Without a doubt I would encourage you to look at cloud software, such as Xero, and here are just a few reasons why:

Real-time information – Keeping your records digitally to submit real-time information to HMRC, means that you can also access this real-time information for your own gains. Want to know how much profit you made in September 2018? Check the software. Want to get an estimate of the tax you’ll have to pay? Check the software. Want to see who owes your business money, and how long its been outstanding? Check the software.

Communication– One of the many benefits of cloud software is that you can give access to anyone you like (and take it away again!) So if you have an accountant or bookkeeper that you want to discuss your accounts with, you can both have separate login details, and be looking at the same set of records at the same time, without being in the same room – or even the same country!

MTD– Most cloud software is now fully compatible with Making Tax Digital, once you are comfortable using the software, it will do all the work in the background for you, calculate the VAT returns, and submit them to HMRC. You just have to post from your original records, and check over the VAT return before hitting the 'submit' button.

Back-up – There is no need for backing up your accounts information on a regular basis, and taking up space on your computer. The cloud systems are backed-up to the cloud after each and every posting, so they will always be accessible. If you have a power-cut, you’ll be able to pick-up exactly where you left off as soon as the lights are back on!

Mobile -  Keeping your records ‘in the cloud’ means that you can access them anywhere and any time. Check what you owe a supplier from your laptop, see if your latest invoice has been paid from your tablet, even submit your VAT return from your mobile! Anywhere you can access the internet, you can access your accounts.

How Cloud 12 Accounts can help you:

Cloud 12 have various packages to suit you and your business requirements, some examples are as follows:

• Cloud software initial set-up.
  
• Cloud software training, and on-going email / telephone support.
  
• VAT review of your data before filing.
  
• Bookkeeping and processing of VAT returns from beginning to end, piles of receipts to VAT submission.
  
• Management accounts, to provide accurate monthly or quarterly accounts to see exactly how your business is performing.
  

Cloud 12 Accounts offer a free consultation service, during this time we can discuss your current arrangements, what you need to do next to be prepared for MTD and which software might suit your business best.

Get in touch now, to make sure you are prepared for April!