The next step in the Making Tax Digital roadmap is almost upon us.
HMRC is pressing ahead with its mandate for all remaining VAT registered businesses to submit their VAT returns via MTD compliant software from April 2022.
All business owners registered for VAT should take some time to familiarise themselves with how they will meet this new requirement and spend time NOW to make sure that plans are in place in good time. Careful planning allows business owners to make informed decisions on what changes (if any) are required.
Check if you have to register for Making Tax Digital
You will need to register for MTD if you have a business in the UK with:
1. Taxable turnover under the tax threshold of £85,000, and
2. You don’t already keep your accounts on EasyBooks or an equivalent
We've created a free ultimate Making Tax Digital resource with all the details you need to know about MTD.
Better watch out: the clock is ticking!
HMRC has been busy helping itself to become more efficient by computerizing VAT submissions. However, up until now, they have focussed their efforts on larger businesses.
Now it’s your turn.
In July 2020 HMRC announced that ALL VAT registered businesses must use approved software to file returns. To achieve this as of April 2022, (this April), you must begin to keep your financial records electronically, i.e. on your laptop, tablet, smartphone, or using a financial service provider.
In addition to the above, April 2022 will start the countdown to MTD for Income Tax and Self-Assessment (MTD ITSA). MTD ITSA will affect over 4 million taxpayers who have a business or property income of over £10,000 (effectively, pretty much all sole traders, partnerships and private landlords).
Although the deadline for the launch has been pushed to 2024, the time will very quickly pass, and as always, we recommend those affected use the time to get used to what these changes will mean. There is a lot of information that HMRC has not yet cascaded.
There is not much time left!
How to register for Making Tax Digital
Here is what you must do:
1. Choose and install MTD-approved accounting software, e.g. EasyBooks.
2. Start keeping all your business financial records on Easybooks from April 1 onwards.
3. Sign up to MTD VAT
4. Let EasyBooks calculate & submit your VAT returns when they are due
Although HMRC is doing this to help themselves, this approach will also help you run your business. Record keeping and income tax returns will become much easier and less manual. Keeping track of what’s happening in your business will be a doddle. After the initial effort, this will make your business much more efficient.
Why you should use Easybooks for MTD
At Easybooks, we've been helping businesses with their submissions since the launch of MTD for VAT, so we have all the experience needed to assist companies with the transition to software. For example, the requirement to retain 'digital records' can sound quite daunting, but it doesn't need to be. It can be quite the opposite with the proper support!
With EasyBooks, you'll have a simple and powerful bookkeeping app to track all of your business expenses.
Having all of your data backed up means that you can relax in the event of an IT catastrophe (or worse, if you still hold all your data on paper!).
Also, you'll be able to track real-time payments from your customers, as well as create, print and send invoices easily.
Have all the inventory, sales, expenses reports in a single and comprehensive app. Forget about spending much time on paperwork with us.
We've already helped thousands of small businesses, feel free to check the reviews at App Store.
Two things are clear:
Soon, you must submit VAT details to HMRC electronically each quarter. In addition, you will have to keep all your business records on a computer. The only way you can conform to these new requirements will be to implement software to run your business.
Ready to register for Making Tax Digital? Start a Free Trial with EasyBooks and use our software for 14 days without any payment.
Simply click on the below button and start your MTD journey.