We’ve got a guest post today from Natasha Penny-Rowe, founder of Busy Books, who discusses why it’s time to embrace making tax digital (MTD). Busy Books offers complete Accountancy & Bookkeeping Services in Wiltshire and the surrounding areas.
We are starting to hear the terms MTD (Making Tax Digital) and ITSA (For Income Tax Self-Assessment) more regularly now.
The forthcoming changes mean in short you will need to keep digital records and use software to update HMRC QUARTERLY through MTD.
The requirements will very soon become mandatory for self-employed people, businesses, landlords and directors as the below timetable shows…
It is time to embrace digital if you have not already.
MTD From April 2022,
If you were previously excluded from the list of MTD for VAT – do not assume that is the case as since April 2022 ALL UK VAT registered businesses, charities and micro entities have to adhere to the MTD requirements. If your income is over the £85,000 threshold then MTD will apply.
Some smaller voluntarily registered businesses may decide to deregister instead of complying with MTD. Deregistration can however also trigger a VAT cost due to the rules about assets on hand, so advice may be needed.
MTD From April 2023,
MTD ITSA will apply to you if you are self-employed, A Director, Small unincorporated business, Or A landlord with business income over £10,000 per annum and are liable for Income Tax.
For Corporation Tax
The government will provide limited companies and businesses with an opportunity to take part in a pilot for Making Tax Digital for Corporation Tax and will not mandate its usage before 2026.
We are already seeing many “Old Skool” Accountants making this year their last in the world of Accountancy.
In turn we are seeing an influx of customers and the requirement for Software being a modern digitally ready firm here at Busy Books.
We embraced digital software 5 years ago and have been educating & encouraging our customers to do the same.
Business owners are seeing the benefit of having digital software not only for MTD compliance but for so many other useful everyday tools –
- Quoting for work
- The ability to send and chase customer invoices and payments
- Keep a track of expenditure
- Even have a rough idea of your tax bill before bringing your accounts to us!
- Keep in touch with us more regularly with online up to date software we both have access to
If you are currently using a non MTD compliant software, Excel sheets, Day & Cashbooks or Paper records – NOW IS THE TIME TO change your processes.
You should be asking Your Accountant how these changes will apply to you and ensure you are prepared.
We will also see a rise of new MTD compliant software coming to the market and businesses should explore trials and offers to see which one best suits them.
Any thoughts, suggestions, or questions
Tel 01373 229589 / 01380 830205
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