As of 1 April 2019, HMRC’s ‘Making Tax Digital’ policy was implemented on a compulsory basis for VAT purposes. This was to enable businesses to keep on top of their affairs and have their financial records up to date, while running more efficiently and smoothly. For many, this policy was the perfect opportunity to reap the rewards of using online accountancy for business.
Digital bookkeeping for business
Many businesses previously struggled when it came to completing their taxes, but gone are the days of endless paperwork and calculations – thanks to the making tax digital for business policy.
This newly implemented scheme was introduced to help businesses become more effective and consistent with their bookkeeping and tax records. Tax recording should now be easier to carry out, with less chance of miscalculations or human errors.
Not only will this process be much simpler for you personally, but the removal of physical paperwork is a great way of minimising your paper waste and actively being more environmentally friendly. Paper filing is definitely something that every office will be glad to see the back of.
One thing that is worth noting is that, as yet, the Making Tax Digital scheme has only been introduced for VAT compliance and for the submission of VAT returns so it has not yet been implemented on a wider scale – which luckily gives you more time to prepare!
Online accountancy for business
Online accountancy for business has many positives when using software like Xero. Xero is designed to make your online accountancy more methodical since the accounting system takes its information directly from your online banking. This eliminates the risk of simple mistakes. Additionally, when used in conjunction with Receipt Bank, Xero is another great way to modernise and streamline your online accounting.
Not only is Xero an excellent piece of software that has been designed to be convenient and easily integrated into your business, but when Receipt Bank is used alongside this platform, you couldn’t ask for a better combination. Receipt Bank allows you to take a simple photograph of purchase invoices and receipts, which can then be attached electronically to statements from your bank feed.
Don’t forget, all of these benefits are very practical when it comes to the end of the month – no more hassle or stress, Xero and Kirkwood Wilson have got your business covered!
Here at Kirkwood Wilson, based in Burscough, near Ormskirk, we are proud to say we are Xero Gold Partners. This means that all of our accountants are specially trained to deliver the highest possible standards of advice, tips, and practical strategies when it comes to all things Xero.
For more information about our digital accounting services, or for a Making Tax Digital consultation, contact Kirkwood Wilson today. Call 01704 546 000 or email [email protected].
As a method of improving processes and efficiency, HMRC’s aim with their ‘Making Tax Digital’ policy is to go paperless. Gone are the days of filing and keeping paper records – hooray! This blog will discuss how this government policy affects individuals and very small businesses, and what you need to know during this process.
Digital bookkeeping for individuals
Making Tax Digital for individuals is not yet a compulsory scheme for self-employed people and landlords, but there is nothing stopping you from signing up anyway – it is all good practice. It has been previously announced that plans to make Income Tax part of the Making Tax Digital scheme have been pushed back until at least April 2020 – so if you are a self-employed person, you still have time!
For those who want to be ahead of the game, there is an Income Tax pilot scheme. This scheme is aimed at those who are self-employed or rent properties and it lets you keep records digitally and send Income Tax updates to HMRC as opposed to filing a Self Assessment tax return.
This has been introduced to allow individuals to see how much Income Tax they might owe as time goes by. Individuals will have to use relevant and well-suited software to keep their own digital records, and HMRC would expect you to send income and expense summaries every three months.
Online accountancy for individuals
While the Making Tax Digital scheme has been implemented for businesses earning over the VAT threshold and not for individuals, it is worthwhile for the small businesses and the self-employed to acquaint themselves with the upcoming processes and changes. These individuals should take the necessary steps to digitalise their VAT returns to ensure a smooth transition into the digital bookkeeping world, before the widespread implementation.
Due to Brexit throwing a few curveballs into the scenario, HMRC have delayed the Making Tax Digital scheme for individuals, so whilst it is not an immediate worry, it would be worthwhile setting yourself up with the relevant, compliant software to ensure you are ready for this inevitable transition.
Perhaps consider relevant software such as Xero or Sage – both are incredibly helpful and recommended for digitising your tax information.
No need to worry or rush into this, no tax information is required just yet but here at Kirkwood Wilson, we would advise that you take every step possible to familiarise yourself with the upcoming policy changes to ensure that when the time comes, you are fully Making Tax Digital ready!
For more information about our digital accounting services, or for a Making Tax Digital for individuals consultation, contact Kirkwood Wilson today. Call 01704 546 000 or email [email protected].