We would like to take this opportunity to remind you about HMRC’s proposed plans to ‘Make Tax Digital’ – “MTD”.
What is MTD?
Making Tax Digital is HMRC’s new plans to make tax administration more efficient and easier for taxpayers by implementing a fully digital tax system which will come into force in April 2018. The reason HMRC is making tax digital is that they hope it will reduce the burden on the taxpayer and make the tax system much clearer and accessible.
How does this affect me?
This means that the way you report your business profits to HMRC is changing. From April 2018 most businesses and self-employed individuals will be required to carry out quarterly digital record keeping communications to HMRC, followed by an annual summary and confirmation submission.
Rutter and Allhusen are asking clients to act now in order that any potential glitches can be ironed out before the new tax regime is upon us. It is hoped that by sorting teething problems out early, this will result in a smooth transition to MTD and subsequently avoid incurring possible HMRC penalties and charges for late submissions.
How do I report digitally to HMRC?
As it stands, you will need to use an accounting software package to submit your data directly to HMRC. Having looked extensively at the various software packages currently available on the market, we feel the current best solution is “Xero” and I am pleased to say that both Jana and Amy are Xero Certified Advisors. With Xero you will be able to:
- View your cashflow in real-time;
- Get paid faster with online invoicing and automatic reminders
- Get automatic daily feeds of your bank transactions
- Manage your paper trail with online file storage
- Get free support anytime you need it
However, HMRC have not completed their preparations for Making Tax Digital, and it may well be that commercial software is not the only option when the system goes live. A Government Gateway type portal is under construction which is intended to allow entry of figures from spreadsheets, but this may not be ready in time.
Is Xero training available?
Rutter and Allhusen Accountants in Shaftesbury will be able to help you every step of the way. We realise MTD may be very daunting and we will therefore provide training sessions for our clients demonstrating how Xero could work for you.
What does Xero cost?
Your Xero licence can be purchased by Rutter & Allhusen on your behalf. Please be aware that we only purchase your Xero licence on your behalf and forward this cost on to you; we do not charge a mark-up on this licence. Please contact us to discuss the various licences available to you so we can find the one which best suits your needs.