03 May Making Tax Digital – When will you need to get digital software?
The answer is as soon as possible if you are running a business to give you time to learn and get familiar with what you need to do and how.
Following the Spring Budget there were a few updates and amendments to the scheme.
MTD will make mandatory that businesses have to report their profits quarterly using suitable digital software. This will have an impact on most businesses with particular emphasis on those business who use spreadsheets or manual books and records to record their accounts. Its time to switch to Cloud Accounting to ensure you are compliant with the new MTD regulations.
Quarterly reporting is due to come into effect for income tax and national insurance purposes from April 2018, VAT from April 2019 and corporation tax from April 2020.
One of the key changes is that for businesses below the VAT threshold, quarterly reporting has been postponed until April 2019.
The MTD timetable is now:
- 2018 – all unincorporated business above the VAT threshold (except large partnerships – turnover above £10m)
- 2019 – all businesses and landlords with annual turnover in excess of £10,000
- 2019 – – all unincorporated business below the VAT threshold
- 2020 – Corporation tax and large partnerships
A pilot scheme is being run from April 2017 until April 2018 so it is practical that sufficient time is allowed to examine the outcome of that pilot, especially where the smallest businesses and landlords are concerned.
While these proposals are instigated by the government, largely to assist in the collection of tax, they nonetheless make good business sense in that they enable businesses to have up to date knowledge of the state of their profit or loss which will not only assist in helping business owners make decisions concerning their business, but also to allow timely opportunities for tax planning.
We therefore believe that the early adoption of enabling systems and software is good business practice.
If you want to fund out more about Cloud Accounting and Digital Software with EA Assist please visit our website here.Click the following links to find out more about Xero and Quickbooks cloud accounting packages or if you would like to speak to one of our team give us a call on 01379 646943.